A higher balance of payments deficit was recorded in the second quarter

The Bangko Sentral ng Pilipinas (BSP) newspaper said on Friday that the Philippines’ balance of payments (BOP) position posted a deficit of $3.6 billion in the second quarter of this year.

In its Balance of Payments Developments report, the Savings and Credit Bank said that was a reversal of the $905 million surplus recorded in the same quarter last year. BSP defines BOP as “A summary of a country’s economic transactions with the rest of the world for a specified period. It is an accounting statement about economic transactions between residents of a country and non-residents.”

She attributed the reversal to a wider current account deficit of $7.9 billion, equal to -7.7 percent of the country’s GDP, in the second quarter of 2022. For comparison, Bill Settlement Payment (BSP) recorded a deficit of $1.3 billion, which is Equivalent to -1.3% of the country’s GDP, in the same quarter of 2021.

“This development was driven by a widening trade deficit in goods, which was muted in part by an increase in net revenue in primary and secondary income, and services account trade,” BSP said.

Meanwhile, the financial account recorded net inflows, or net borrowing by residents from the rest of the world, of $2.87 billion in the second quarter of 2022.

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The current data arose from continuous flows in foreign direct investment and other investment accounts.

High H1 . deficiency

The Balance of Payments Center posted a higher deficit of $3.1 billion in the first half of 2022 than a deficit of $1.9 billion recorded in the same period last year. This result is primarily due to the widening of the current account deficit due to the high trade deficit.

Meanwhile, the financial account was reversed to net inflows in the first six months of 2022 from net outflows in the same period last year due to lower net outflows for portfolio investments and higher net inflows for other investments.

Meanwhile, the BSP said the emerging BOP position for 2022 is expected to post a higher deficit of $8.4 billion, or -2.0 percent of GDP, than the previous forecast of $6.3 billion, which is -1.5 percent of output. gross domestic.

The central bank attributed this development to the expected expansion in increasing the current account deficit to $20.6 billion (-5.0 percent of GDP) from $19.1 billion (-4.6 percent of GDP), due to the continued acceleration of product imports coupled with moderation merchandise exports. .

For 2023, the total balance of payments is seen as broadly unchanged from the previous deficit forecast of $2.5 billion or -0.6 percent of GDP.

BSP attributed the outlook to expectations of continued flows in the financial account backed by improved business and consumer sentiment for the coming year, resilient domestic demand and continued implementation of key legislation aimed at improving the country’s overall investment climate along with a narrower current account deficit.

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