The country’s balance of payments (BOP) deficit narrowed to $9 million in January, from the $214 million registered in December 2016, latest data from the Bangko Sentral ng Pilipinas (BSP) showed.
This is the fourth month that the country posted consecutive BOP deficits since October 2016, but the BSP expects a turnaround in the coming months.
Although the government missed its BOP projection of a $500-million BOP surplus in 2016, it forecasts a BOP surplus of $1 billion by the end of this year.
While January continued to print a deficit, the BSP expressed optimism that the Philippines’s external position will recover on the back of strong fundamentals.
“This is a carryover of the negative sentiment we saw in December 2016. We don’t have yet the trade, services and financial components, but the headline numbers indicate that debt payments by national government and foreign-exchange operations of the BSP brought about the small deficit during the month,” said Diwa C. Guinigundo, central bank deputy governor for the monetary stability sector.
“Some partial offsets were seen in the national government foreign-exchange deposits, as well as BSP’s investments income from abroad. We expect a turnaround during the year on account of the country’s continued resilience and strong macroeconomic fundamentals,” he added.