Philippine balance of payments deficit seen to hit $3.4bn in 2014

The Philippines' balance of payments (BOP) position for 2014 is seen ending in deficit this year from a previous forecast of a surplus, the country's central bank said on Friday.
Bangko Sentral ng Pilipinas, or the central bank, said the BOP deficit will hit 3.4 billion U.S. dollars by year-end, a reversal of projected 1.1 billion dollars surplus announced in July. The country registered a 5.1 billion dollars surplus last year.
"Specifically, the normalization of policy in the U.S. has affected financial markets especially since there was a reallocation of assets affecting the Philippines and other emerging markets," central bank Governor Amando M. Tetangco, Jr. said.
The latest central bank data showed that the BOP position remained in a deficit of 3.43 billion dollars as of September.
Tetangco, however, said the projected deficit will not adversely affect the country's gross international reserves, which is expected to settle at around 80 billion dollars by year-end.
Despite a BOP deficit, the current account is expected to remain in surplus this year, an indication that the Philippine economy remains healthy.
Tetangco said the central bank even hiked its projection for the current account surplus to 6.6 billion dollars by the end of the year from the previous forecast of 6 billion dollars on a smaller trade deficit due to increasing imports.
The country's BOP position is expected to return to a surplus next year, which is forecast to be 1 billion dollars.