The country’s overall balance-of-payments (BOP) position for the first five months of 2018 posted a bigger deficit of $2.08 billion compared to the $136-million shortfall recorded in the comparable period in 2017.
In a statement, the Bangko Sentral ng Pilipinas said the 1,430-percent increase in dollar outflows from the Philippine economy for the period could 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 deficit recorded in the same month last year, the BSP said.
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 was consistent with the final gross international reserve (GIR) level of $79.2 billion as of end-May 2018.
At this level, the GIR represented more than ample liquidity buffer and was equivalent to 7.6 months’ worth of imports of goods and payments of services and primary income. It was 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.