The country’s overall balance of payments (BOP) position in July 2018 posted a deficit of US$455 million, lower than the US$678 million BOP deficit recorded in the same month last year. Outflows in July 2018 stemmed mainly from payments made by the National Government (NG) for its maturing foreign exchange obligations and foreign exchange operations of the BSP. 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 US$3.71 billion compared to the US$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 reported BOP position is consistent with the final GIR level of US$76.72 billion as of end-July 2018. 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.1,2
1 Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.
2 The preliminary data on GIR as of end-July 2018 was released to the public on 7 August 2018. Preliminary data are released every 7th of the month in the Statistics section of the BSP’s website in compliance with the International Monetary Fund’s (IMF) Special Data Dissemination Standard (SDDS). If the 7th day of the month falls on a weekend or is a non-working holiday, the release date shall be the working day before the 7th. Meanwhile, the BOP position and final GIR data are published in the BSP’s website every 19th day of the month. If the 19th day of the month falls on a weekend or is a non-working holiday, the release date shall be the working day nearest to the 19th.