BSP reports lower deficit in July

THE country’s overall balance of payments (BOP) position in July 2018 posted a deficit of $455 million, lower than the $678 million BOP deficit recorded in the same month last year.

Outflows in July stemmed mainly from payments made by the national government (NG) for its maturing foreign exchange obligations and foreign exchange operations of the Bangko Sentral ng Pilipinas. These were partially offset, however, by net foreign currency deposits of the NG and income from the BSP’s investments abroad during the month.

Despite the improvement in the overall BOP position for the month, the cumulative BOP position yielded a higher deficit of $3.71 billion compared to the $1.38 billion BOP deficit recorded in the comparable period in 2017.

The higher cumulative BOP deficit for the period may be attributed partly to the widening merchandise trade deficit (based on the Philippine Statistics Authority’s preliminary data) for the first half 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 BSP said.

The reported BOP position is consistent with the final GIR level of $76.72 billion as of July. At this level, the GIR represents more than ample liquidity buffer and is equivalent to 7.4 months’ worth of imports of goods and payments of services and primary income. It is also equivalent to 6.1 times the country’s short-term external debt based on original maturity and 4.1 times based on residual maturity. (PR)

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