MANILA – The Bangko Sentral ng Pilipinas on Wednesday announced that the country’s balance of payment registered a deficit of $2.879 billion last year, the first in nine years.
The last time that the country registered a deficit was in 2004 at $280 million.
“You may recall that in Q1 (first quarter of) 2014, capital flowed out of EMEs (emerging markets and economies), including the Philippines, in reaction to global developments, particularly to the commencement of Fed (US Federal Reserve) tapering,” said BSP Governor Amando M. Tetangco Jr.
He added, “At that time, our cumulative deficit topped $4.4 billion. When market viewed the Fed taper as orderly, global funds returned to EMEs that had good fundamentals including the Philippines.”
One of the main reasons for the BOP deficit was because of the US Fed’s reduction in its monthly asset purchases. This resulted to a $4.48 billion deficit in January 2014.
While the stimulus ended in October, the Philippines was affected after speculation on the tampering and scaling down of bond purchases surfaced.
Despite this, the BSP is confident that they will be able to return the BOP to $1 billion this year.