The country’s overall balance of payments (BOP) position in August 2017 posted a slight deficit of US$7 million, lower by US$671 million than the previous month’s shortfall of US$678 million. Outflows during the month were largely offset by the NG’s net foreign currency deposits and the BSP’s income from its investments abroad. The reduced deficit also reflected the thin trading of portfolio investments during the “ghost” month (August).
On a cumulative basis, the overall BOP position reached a deficit of US$1.391 billion for the first eight months of the year, a turnaround from the US$1.531 billion surplus recorded in the same period a year ago. The cumulative deficit was largely accounted for by portfolio investments1 which, for the period January-August this year, reversed to net outflows of US$319 million from US$2.1 billion net inflows during the same period last year on the back of domestic and global developments including the US Federal Reserve interest rate hike, global terrorism concerns, and closure orders for some mining companies in the country. Meanwhile, the Philippine Statistics Authority (PSA)-based trade balance showed steady improvement as it registered a narrower deficit of US$14.7 billion during the January-July period this year compared to the US$15.4 billion shortfall in the same period a year ago. For the same period, the growth of merchandise exports at 13.8 percent outpaced that of merchandise imports at 7.9 percent. It may also be noted that the trade deficit also reflected increased percent share to total imports of raw materials and intermediate goods at 38.6 percent, and capital goods imports at 32.4 percent, indicating continued expansion in domestic economic activity.
1 Based on the BSP-registered foreign portfolio investments transactions