The country’s balance of payments’ position ended 2018 with a deficit of $2.31 billion, driven mainly by the widening trade deficit, the Bangko Sentral ng Pilipinas said Friday.
The deficit was better than the government target of a $5.5-billion gap for the year. But it was significantly bigger than the deficit of $863 million posted 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 11 months of the year that was brought about by the sustained rise in imports of raw materials and intermediate goods as well as capital goods to support domestic economic expansion,” the Bangko Sentral said in a statement.
The country’s trade-in-goods deficit in November 2018 increased 19 percent to $3.9 billion from a $3.28-billion shortfall a year ago, as imports continued growing while exports declined.
Total exports were valued at $5.57 billion in November, representing a decrease of 0.3 percent, from $5.58 billion in November 2017. Total imports, meanwhile, rose to $9.47 billion in November from $8.86 billion a year ago, or a growth rate of 6.8 percent.
The figure brought the year-to-date trade deficit to $37.69 billion in the first 11 months of 2018.
The BoP posted a surplus of $2.44 billion in December, significantly higher than the $917-million surplus in the same month of the previous year.
Inflows in December 2018 stemmed mainly from the central bank’s foreign exchange operations, the government’s net foreign currency deposits and the bank’s income from its investments abroad during the month.
These were partially offset, however, by the payments made by the government for its foreign exchange obligations during the month in review.
The BoP position in 2018 reflected the final gross international reserves level of $79.19 billion as of end December.
“At this level, the GIR represents a more than ample liquidity buffer and is equivalent to seven months’ worth of imports of goods and payments of services and primary income. It is also equivalent to six times the country’s short-term external debt based on original maturity and 4.1 times based on residual maturity,” the Bangko Sentral said.