Image: Reuters Berita 24 English - Taking into account the issues facing the global economy , the Philippine central bank said on Friday tha...
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| Image: Reuters |
Berita 24 English - Taking into account the issues facing the global economy, the Philippine central bank said on Friday that it expects the country's current account balance to show larger deficits in 2022 and 2023 than originally forecast.
The Bangko Sentral ng Pilipinas (BSP) has amended its balance of payments (BOP) predictions, estimating that the current account deficit will reach $19.1 billion in 2022, or 4.6 percent of GDP.
This contrasts to a March prediction of a $16.3 billion shortfall, or 3.8 percent of GDP, for this year.
The modifications to BOP estimates, according to the BSP, take into account the build-up of external risks, ongoing global monetary policy tightening, and persistent COVID-19 problems.
The BSP cited the lower global economic forecast during the Ukraine-Russia war and its influence on commodity prices, as well as China's downturn and the impact on capital flows on central bank policy tightening.
The current account deficit is predicted to reach $20.5 billion, or 4.4 percent of GDP, in 2023, up from $17.1 billion, or 3.7 percent of GDP, in the previous projection.
With a larger current-account deficit predicted for 2022, the Philippines' BOP is expected to run a $6.3 billion deficit this year (1.5 percent of GDP), up from $4.3 billion in March (1.0 percent of GDP).
The projected BOP deficit for 2023 has been maintained at $2.6 billion (0.6 percent of GDP).
Money transferred by Filipinos overseas, a critical financial flow supporting the Philippine economy, is predicted to rise by 4% this year and in 2023, according to the BSP, citing base effects that are expected to diminish and partner economies' recovery to pre-pandemic levels.
The country's gross international reserves, on the other hand, are expected to reach $105 billion by the end of 2022 and $106 billion by the end of 2023, down from $108 billion and $109 billion, respectively, in March.
