The balance of payments (BOP) position registered a deficit of $1.2 billion in the second quarter, lower than the $3.6 billion deficit recorded in the same quarter last year, the Bangko Sentral ng Pilipinas (BSP) said Friday.

This development was due to the decline in the current account deficit, which resulted largely from the narrowing of the trade in goods deficit and the increase in net receipts of trade in services.

Meanwhile, the financial account posted lower net inflows in the second quarter due mainly to the reversal of the portfolio investment account to net outflows.

The current account registered a deficit of $3.6 billion (equivalent to -3.4 percent of the country's GDP) in the second quarter, lower than the $8 billion deficit (equivalent to -7.8 percent of the country's GDP) recorded in the same quarter in 2022.

This development resulted mainly from the narrowing of the trade in goods deficit alongside the increase in net receipts in the trade in services and secondary income accounts. This was partly muted by the decrease in net receipts in the primary income account.

The capital account recorded net receipts of $18 million in the second quarter, slightly lower by 4.5 percent than the $19 million net receipts recorded in the second quarter . In particular, net capital transfers of financial corporations and other sectors declined to $1 million in the second quarter of 2023 from $3 million in the second quarter.

The financial account recorded net inflows (or net borrowing by residents from the rest of the world) of $2 billion in the second quarter of the year, lower by 34.9 percent than the $3 billion net inflows posted in the same period a year ago.

This was on account of the reversal of the portfolio investment account to net outflows coupled with moderately lower net inflows of direct and other investments.

The BOP position posted a surplus of $2.3 billion in the first half of 2023, a reversal from the $3.1 billion deficit recorded in the same period a year ago. This outcome was due primarily to the decline in the current account deficit, which resulted from higher net receipts of trade in services and lower trade in goods deficit. Moreover, the financial account posted higher net inflows mainly from other investments. BSP