THE COUNTRY’s balance of payments (BoP) remained in deficit in November as the government settled its foreign debts, although substantially narrower than the peak recorded a year back, the central bank reported late Tuesday.

The external payments position settled at a $44-million deficit last month, down from the $368-million gap posted in October and from the record $1.671-billion deficit logged in November 2016, the Bangko Sentral ng Pilipinas (BSP) said.

The BoP measures the country’s transactions with the rest of the world at a given time. A deficit means more funds fled the economy than what went in, while a surplus shows that more money entered the Philippines.

“Outflows in November 2017 stemmed mainly from payments made by the national government for its maturing foreign exchange obligations during the month in review,” the central bank said in a statement.

The debt payments were offset by bigger foreign currency deposits held by the national government, as well as the steady stream of income from the BSP’s offshore investments.

The November print brought the year-to-date BoP tally at a $1.78-billion deficit, wider than the $206-million deficit during the comparable period in 2016.

This is closer to the $1.4-billion deficit expected by the BSP for the entire year, which is wider than $500-million shortfall expected during its May policy review and the $420-million deficit posted as of end-2016.

The BSP attributed the wider deficit to a “big reversal” in foreign portfolio investments this year, which saw more flighty funds head for the exit amid uncertainties in the financial markets.

Hot money posted a $634.53-million net outflow in the 11 months to November as persistent concerns about succeeding interest rate increases in the United States, global terrorist attacks and North Korea’s nuclear missile tests continue to weigh on investor sentiment.

These added to uncertainty towards the local mining industry after several sites were ordered closed by the government in February.

Despite the bigger BoP deficit, the country’s dollar reserves provided a degree of comfort at $80.313 billion in November, enough to pay 8.2 months’ worth of import duties.

Several economists have pointed out that the widening current account deficit, which makes up the bulk of the country’s external payments position, has been affecting market sentiment towards the Philippines.

However, central bank officials have said that the deficit simply reflects increased imports of raw materials and intermediate goods that will be used for bigger infrastructure spending and business activity in the Philippines.

Imports are expected to grow by 10% annually this year and in 2018.

The BSP last week announced revisions to its BoP forecasts for this year and 2018, saying it still expected the Philippines’ external payments position to remain “manageable” at an equivalent of below one percent of gross domestic product (GDP).

For 2017, the deficit will settle at 0.5% of GDP, while the 2018 gap is expected to be equivalent to just 0.3% of GDP. — Melissa Luz T. Lopez