MANILA: The balance of payments (BOP) position of the Philippines continued to bleed as the deficit more than doubled in the first two months of the year with more US dollars exiting the country.
Data released by the Bangko Sentral ng Pilipinas (BSP) showed the BOP shortfall reached $961 million in the first two months of the year, 116 percent higher than the $445 million deficit recorded in the same period last year.
“The higher cumulative BOP deficit for the first two months of the year may be attributed partly to the widening trade deficit in January, as well as higher net outflows of foreign portfolio investments.
However, the outflows were partially offset by the net foreign currency deposits of the national government, as well as the income from the central bank’s investments abroad.
Latest data showed foreign portfolio investment or hot money reverted to a net outflow in February as investors cashed in on their profits with the impending rate hikes by the US Federal Reserve.
Hot money or speculative investments yielded a net outflow of $545.14 million in February, reversing the $126.16 million inflow recorded in January. The BSP sees a net outflow of hot money reaching $900 million this year. The country booked a BOP deficit of $863 million last year, more than double the $420 million shortfall registered in 2016 brought about largely by the big reversal in foreign portfolio investments due to external shocks.
