THE country’s ballooning trade deficit caused the balance of payments (BOP) position to register a contraction of $4.7 billion in the third quarter, according to the Bangko Sentral ng Pilipinas (BSP).
The BSP said the contraction in the BOP was a reversal from the $1.3-billion surplus recorded in the same quarter last year.
This was due to a wider current account deficit of $5.8 billion in the third quarter of 2022 compared with the $974-million deficit in the same quarter in 2021.
“This development was driven by the wider trade in goods deficit, which was partly muted by the increase in net receipts in the primary and secondary income, and trade in services accounts,” the BSP said.
The financial account registered higher net inflows or net borrowing by residents from the rest of the world amounting to $2.8 billion in the third quarter of 2022 versus the $2.6-billion net inflows in the same period last year.
“(This stemmed) from the sustained net inflows in the other investment, direct investment, and financial derivatives accounts,” BSP said.
9-month deficit up
Meanwhile, BSP said the BOP position posted a higher deficit of $7.8 billion in the first nine months of 2022 from the $665-million deficit recorded in the same period a year ago.
BSP said this was driven by a wider current account deficit of $17.8 billion compared to the $2.3-billion deficit in the same period last year, which in turn was the result of a higher trade in goods deficit.
The financial account also registered higher net inflows of $10.3 billion in the first three quarters of 2022 from the $1.3-billion net inflows recorded in the same period last year.
“This was mainly due to lower net outflows of portfolio investments and higher net inflows of other investments,” BSP said.
The BSP also said the country’s gross international reserves (GIR) amounted to $93 billion as of end-September 2022, lower than the $106.6 billion registered as of end-September 2021 (full story: https://businessmirror.com.ph/2022/12/08/debt-forex-operations-slash-end-november-gir-to-93-95b/).
The peso-dollar trade averaged P56.36 per $1 in the third quarter of 2022. On a quarter-on-quarter basis, the peso depreciated by 6.6 percent from an average of P52.64 per $1 in the second quarter of 2022.
Similarly, the peso depreciated by 11.1 percent from an average of P50.11 per $1 recorded in Q3 2021.