The country’s balance of payments (BoP) deficit further widened in May, the Bangko Sentral ng Pilipinas (BSP) reported on Tuesday, raising the year-to-date figure past the $2-billion mark.
The $583-million deficit for the month followed April’s $270-million gap and was also wider than the $59 million recorded a year earlier. It was the largest since July 2017 when the payments position stood at a deficit of $678 million.
“Outflows in May 2018 stemmed mainly from foreign exchange operations of the BSP and payments made by the national government for its maturing foreign exchange obligations,” the Bangko Sentral said in a statement.
These were partially offset by net foreign currency deposits of the national government and income from the central bank’s investments abroad during the month, it added.
May’s result brought the country’s five-month payments balance to a $2.080-billion deficit, significantly wider than the $136 million recorded in the same period last year.
It also surpassed the BSP’s full-year BoP deficit forecast of $1.5 billion.
“The higher cumulative BoP deficit for period may be attributed partly to the widening merchandise trade deficit (based on Philippine Statistics Authority data) for the first four months of the year that was brought about by the sustained rise in imports of raw materials and capital goods to support domestic economic expansion,” the central bank noted.
The trade deficit widened by 59.3 percent in January-April to $12.2 billion, from $7.656 billion a year earlier, based on latest available data.
The Philippines ended 2017 with a BoP deficit of $863 million, narrower than the revised $1.038 billion posted in 2016.
The BSP, meanwhile, said the payments balance was consistent with the country’s final gross international reserves (GIR) level of $79.20 billion as of end-May.
“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 added, noting that end-May reserves were 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.