5-month dollar outflows surge 14 times last year’s level

Bangko Sentral ng Pilipinas. INQUIRER.net FILE PHOTO

The country’s overall balance of payments position for the first five months of 2018 posted a higher deficit of $2.08 billion compared to the $136-million deficit recorded in the comparable period in 2017.

In a statement, the Bangko Sentral ng Pilipinas (BSP) said the 1,430-percent increase in dollar outflows from the Philippine economy for the period may be attributed partly to the widening merchandise trade deficit “that was brought about by the sustained rise in imports of raw materials and capital goods to support domestic economic expansion.”

The balance of payments  in May 2018 alone posted a deficit of $583 million, higher than the $59 million BOP deficit recorded in the same month last year, the BSP said.

Foreign exchange operations

The central bank said that outflows in May stemmed mainly from foreign exchange operations of the BSP and payments made by the national government for its maturing foreign exchange obligations.

These were partially offset, however, by net foreign currency deposits of the government and income from the BSP’s investments abroad during the month.

The reported BOP position is consistent with the final gross international reserve level of $79.20 billion as of end-May 2018.

At this level, the GIR represents more than ample liquidity buffer and is equivalent to 7.6 months’ worth of imports of goods and payments of services and primary income. It is also equivalent to 6.2 times the country’s short-term external debt based on original maturity and 4.3 times based on residual maturity.