The country’s current account deficit is forecast to exceed 2 percent of gross domestic product (GDP) with more imports than exports, according to investment bank Barclays.
“The current government’s massive infrastructure program is seen to result to wider current account deficit in the next couple of years,” PNA quoted Rahul Bajoria, director of the research unit of Barclays, as saying in a briefing at the sidelines of the site visit by economists, bank analysts and portfolio strategists at the New Clark City.
However, Bajoria said the Philippines’ current account continues to have structural backing, from dollar remittances by overseas Filipino workers.
In 2017, the country’s current account deficit amounted to $2.5 billion, about 0.8 percent of domestic output. The deficit resulted to the decline of the country’s balance of payment (BOP) position.
BOP as of end-August this year posted a deficit of $2.44 billion as the country imports more raw materials, intermediate goods and capital goods on back of higher domestic requirements, the Bangko Sentral ng Pilipinas (BSP) reported on Tuesday.
On the other hand, BOP last August alone posted a $1.27 billion surplus, an improvement from the $7 million deficit in August 2017.
“Inflows in August 2018 stemmed mainly from net foreign currency deposits of the National Government (NG) and income from the BSP’s investments abroad during the month,” the central bank said in a statement.
“These were partially offset, however, by the payments made by the NG for its foreign exchange obligations and foreign exchange operations of the BSP during the month in review,” it added.