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Nov BoP deficit
The Philippines’ Balance of Payments (BoP) deficit widened to $1.7 billion in November 2020, according to the Bangko Sentral ng Pilipinas (BSP). This is a significant increase from the $429 million deficit recorded in the same month last year.
The BoP is a record of all economic transactions between the Philippines and the rest of the world. It includes trade in goods and services, as well as financial transactions such as foreign investments and remittances from overseas Filipinos.
The widening of the BoP deficit in November was mainly due to the increase in the country’s merchandise trade deficit, which reached $2.2 billion. This was driven by the increase in imports, particularly of raw materials and intermediate goods, as the country’s manufacturing sector continued to recover from the impact of the COVID-19 pandemic.
On the other hand, the country’s services trade surplus narrowed to $1.1 billion in November, from $1.3 billion in the same month last year. This was due to the decline in travel receipts, as the pandemic continued to restrict international travel.
Meanwhile, the country’s financial account recorded a net inflow of $1.1 billion in November, driven by the increase in foreign portfolio investments and other investments. This was a significant improvement from the net outflow of $1.4 billion recorded in the same month last year.
Despite the widening of the BoP deficit in November, the BSP remains optimistic about the country’s external position. In a statement, the BSP said that the country’s BoP deficit for the full year 2020 is expected to be lower than the $2.4 billion deficit recorded in 2019.
The BSP also noted that the country’s gross international reserves remained ample at $104.8 billion as of end-November 2020, which is equivalent to 10.1 months’ worth of imports of goods and payments of services and primary income.
Overall, the widening of the BoP deficit in November reflects the ongoing impact of the COVID-19 pandemic on the Philippine economy. However, the BSP’s optimistic outlook suggests that the country’s external position remains resilient, and that the economy is on track for a gradual recovery in the coming months.