$24-M payments deficit recorded in June

MANILA, Philippines - The country’s balance of payments position went back to a deficit in June after recording a surplus in the previous month, the Bangko Sentral ng Pilipinas reported yesterday.

The country’s BOP incurred a deficit of $24 million in June, reversing the $692-million surplus in the same month last year. At the same time, this was a turnaround from the $373-million BOP surplus recorded in May.

The BOP is a summary of a country’s transactions with the rest of the world. This is made up of trade, foreign direct and portfolio investments, and even remittances from Filipinos abroad.

In the first half of the year, the country saw a BOP deficit of $4.144 billion, a reversal of the $2.577-billion surplus recorded in the same period in 2013.

This was largely due to the $4.480-billion deficit recorded in January due to heightened volatility in global financial markets.

January marked the start of the US Federal Reserve’s reduction in its massive monthly purchases.

Speculation on the start of the tapering and the actual scaling down of stimulus prompted capital outflows from emerging markets including the Philippines as investors rebalanced their portfolios.

The central bank expects the BOP position to settle at a surplus of $1.1 billion by year-end, 78 percent below the $5.085 billion recorded in 2013.