THE country’s dollar transactions yielded a deficit in September this year after two consecutive months of recovering in surplus territory, the Bangko Sentral ng Pilipinas (BSP) reported on Tuesday.
The country’s overall balance of payments (BOP) position—or the data summary of all the country’s transactions with the rest of the world—hit a $412-million deficit in September 2021. This is a reversal of the surplus in the previous two months, which reached a total $1.69 billion in July and August.
It is also a turnaround from the $2.1-billion surplus seen in the same month last year.
The BOP is usually considered as an important economic indicator in an economy as it shows the level of earnings or expenses of the Philippines with its transactions with the world.
A deficit means that the country had more dollar expenditures than its dollar earnings during the period.
The BSP attributed the BOP deficit in September to outflows arising mainly from the debt service payment of the National Government’s (NG) foreign currency debt obligations.
The September deficit pushed the BOP position of the country to a deficit of $665 billion in the first nine months of the year.
This is a reversal from the $6.88-billion surplus recorded in the same January to September period a year ago.
“Based on preliminary data, this cumulative BOP deficit was partly attributed to a wider merchandise trade deficit and lower net foreign borrowings by the NG compared to the same period last year,” the BSP said in a statement.
Just last month, the BSP announced that it has lowered their projection for the country’s BOP for this year and for 2022, taking into consideration current deficits in the country’s external position as well as recent economic developments in the local and international front.
The 2021 BOP projection was from a surplus of $7.1 billion down to $4.1 billion for this year on a “more guarded view” of economic recovery. The 2022 BOP projection has also been lowered from $2.7 billion down to a $1.7 billion surplus.
This means that the country should incur an average of about $1.6-billion surplus on average in the last three months of the year to hit the BSP’s new projection.