Philippines Sees Wider 2018 Current Account Gap on Robust Imports
Manila. The Philippines is set to post its first current account deficit in more than a decade this year, with the gap expected to widen in 2018, due to strong imports, the central bank said on Friday (15/12).
The central bank revised its current account balance forecast for this year, predicting a deficit of $100 million, smaller than a previous estimate of $600 million. This year's gap would be the country's first current account deficit since 2002.
For next year, the current account deficit is forecast to widen to $700 million, with the projected 10 percent growth in imports outpacing a 9 percent forecast rise in exports.
"The current account remains a very good number. It means the Philippine economy is sustaining its positive position," central bank deputy governor Diwa Guinigundo said.
The Philippines is on track to meet its 6.5-7.5 percent growth target this year after the local economy clocked a sizzling 6.9 percent growth in the third quarter, making it among the fastest growing economies in the world.
Imports in January-October grew 8.3 percent from a year earlier, driven by shipments of transport equipment, industrial machinery and iron and steel, as the government boosts infrastructure spending.
Outbound shipments in the 10-month period rose 11.7 percent, prompting the central bank to raise its full-year exports growth estimate to 11 percent from 5 percent previously.
Philippine President Rodrigo Duterte, who took office more than 17 months ago, has promised to usher in a "golden age of infrastructure" through his six-year $180 billion "Build, Build, Build" program.
The central bank also revised its forecast for the 2017 balance of payments position to a deficit of $1.4 billion - equivalent to 0.5 percent of GDP - from a deficit of $500 million previously. The BOP deficit is seen narrowing slightly to $1 billion in 2018. The country's foreign exchange reserves at year-end are expected to reach $80.7 billion, slightly higher than its previous forecast, and $80.0 billion in 2018.
Reuters
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