2018 BoP shortfall lower than forecast
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Fri, 18 Jan 2019 16:24:14 +0000
The country’s balance of payments (BoP) surplus widened in December, the Bangko Sentral ng Pilipinas (BSP) reported on Friday, but the full-year tally remained in deficit and was more than double the 2017 shortfall.
December’s $2.442-billion surplus was significantly higher than the $847-million and $917-million surpluses recorded in November and a year earlier. It was also the largest since July 2012 when the payments position stood at a surplus of $3.182 billion.
“Inflows in December 2018 stemmed mainly from the BSP’s foreign exchange operations, National Government’s net foreign currency deposits, and BSP’s income from its investments abroad during the month,” the central bank said in a statement, adding that these were partially offset by government payments for maturing foreign exchange obligations.
Notwithstanding the surplus, the full-year result was a deficit of $2.306 billion, wider than the $863 million recorded in 2017 but lower than Bangko Sentral’s $5.5-billion deficit forecast.
The central bank said the higher cumulative BoP deficit was largely brought about by a merchandise trade deficit in the first 11 months of last year, which it attributed to “the sustained rise in imports of raw materials and intermediate goods as well as capital goods to support domestic economic expansion.”
The trade deficit widened by 6.1 percent as of end-November 2018 to $25.7 billion, from $24.23 billion a year earlier, based on latest available data.
Last year’s payments balance position, meanwhile, is consistent with the country’s final gross international reserves (GIR) of $79.19 billion as of end-December 2018.
“At this level, the GIR represents a more than ample liquidity buffer and is equivalent to 7 months’ worth of imports of goods and payments of services and primary income,” the BSP said.
The GIR is also equivalent to 6 times the country’s short-term external debt based on original maturity and 4.1 times based on residual maturity, it added.
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