THE balance of payments (BoP) position returned to a surplus in December, although the deficit widened over the course of 2017, the Bangko Sentral ng Pilipinas (BSP) said on Friday.

BoP, a measure of the relative size of incoming and outgoing funds flows, was at a $917-million surplus in December, against a $214 million deficit a year earlier, and a $44-million deficit in November.

The December surplus brought the 2017 deficit to $863 million, compared with $1.78 billion in the 11 months to November.

In 2016, the deficit was $420 million.

The 2017 full-year deficit was narrower than the bank’s forecast of $1.4 billion. The deficit forecast for 2018 is $1 billion.

In a statement, the BSP attributed the December inflows to its foreign exchange operations, the government’s net foreign currency deposits and the central bank’s income from its overseas investments.

“These were partially offset by the payments made by the [government] for its maturing foreign exchange obligations during the month in review,” the central bank said.

The peso averaged P50.3792 in December after touching the P49 level toward the last trading sessions. BSP Governor Nestor A. Espenilla, Jr. said that the central bank conducts “tactical operations” in order to temper sharp swings in the daily exchange rate.

Meanwhile, the central bank said the wider BoP deficit in 2017 was mainly due to the widening merchandise trade deficit.

Data from the Philippine Statistics Authority released last week showed that the trade deficit widened at the end of November to $3.78 billion year-to-date, up from $2.81 billion from a year earlier.

Imports amounted to $8.74 billion during the period, up 18.5%, while exports totaled $4.96 billion, up 1.6%.

In an earlier interview, UnionBank of the Philippines Chief Economist Ruben Carlo O. Asuncion said the widening trade deficit is “not bothersome” since the country is moving from being consumption-driven to investment-led.

The central bank also attributed the wider deficit to “the reversal of foreign portfolio investments (based on BSP-registered transactions) to a net outflow during the year from net inflows in 2016.”

Gross international reserves (GIR) in 2017 totaled $81.6 billion at the end of December.

“The GIR level remains adequate as it can cover 8.3 months’ worth of imports of goods and payments of services and primary income,” the central bank said.

“It is also equivalent to 5.8 times the country’s short-term external debt based on original maturity and 4.2 times based on residual maturity.”

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