Updated Dec 15, 2018, 11:51:57 AM
Metro Manila (CNN Philippines, December 14) — The Philippines continued to spend more than it earned in the third quarter, more than double the deficit it posted for the same quarter last year.
Latest data from the Bangko Sentral ng Pilipinas (BSP) reported that the country's balance of payments is at a $1.9-billion deficit, much higher than the $662 million recorded for the same quarter a year ago.
The balance of payments is a summary of all the transactions of a country with the rest of the world. It can be split into two categories, the current account (trade in goods and services) and the financial account (includes trade in financial instruments, central bank reserves, remittances and foreign aid).
For the third quarter data, the BSP said it was driven by the deficit in the current account, which in turn was driven by imports in line with the government's infrastructure program.
The trade deficit, or the amount of imports compared to exports, widened to a record high of $4.21 billion in October according to the Philippine Statistics Authority.
"Meanwhile, the financial account recorded net inflows (or net borrowing by residents from the rest of the world), a reversal from the net outflows posted in the same quarter a year ago," the BSP added.
This leaves the Philippines' gross international reserves to $74.9 billion as of September, lower than the $81 billion recorded for the same period last year.
This covers 6.6 months worth of imports, payment for services and primary income.
"The year-on-year decrease in reserves was due mainly to outflows arising from the BSP's foreign eXchange operations, the NG's payments for its foreign eXchange obligations, and revaluation losses on foreign currency denominated reserves and gold holdings," the BSP explained.