The country’s balance of payments (BoP) deficit expanded to $569 million in June, the largest recorded by the Philippines this year, according to data from the Bangko Sentral ng Pilipinas (BSP).
Data from the BSP showed that the June deficit is larger than the $59 million posted in the previous month, and a reversal of the $418 million surplus chalked up a year ago.
Central Bank Deputy Governor for the Monetary Stability Sector Diwa C. Guinigundo said the development was due mainly to higher corporate demand for dollars that affected the foreign-exchange operations of the BSP.
The large demand was coupled with debt payments by the national government to further drove the deficit during the month.
Guinigundo said the deficit could have been larger, if not mitigated by the national government’s deposits with the BSP and inflows from the BSP’s investment income from abroad.
“Although trade data are not yet available for June, we surmise that while exports continued to recover, the expanding economy pushed imports higher, particularly of capital goods and raw materials,” Guinigundo told reporters.
“This contributed to the recent downtrend of the peso against the US dollar, even as the overall macroeconomic fundamentals remain robust,” he added.
In January to June, the BoP deficit reached $706 million, a reversal of the $216-million surplus recorded in the same period a year ago.
Earlier, the BSP said it expects the country’s BoP to register a deficit of $500 million by the end of the year. The Central Bank was more optimistic last December, when it announced that the country would record a $1-billion surplus this year.
The BoP is the country’s summary of transactions with the rest of the world.