{"id":19476,"date":"2024-06-27T03:01:42","date_gmt":"2024-06-27T03:01:42","guid":{"rendered":"https:\/\/energybuzz.ph\/staging\/6915\/philippines-current-account-deficit-seen-to-further-narrow-this-year\/"},"modified":"2024-06-27T03:01:42","modified_gmt":"2024-06-27T03:01:42","slug":"philippines-current-account-deficit-seen-to-further-narrow-this-year","status":"publish","type":"post","link":"https:\/\/energybuzz.ph\/staging\/6915\/philippines-current-account-deficit-seen-to-further-narrow-this-year\/","title":{"rendered":"Philippines\u2019 current account deficit seen to further narrow this year"},"content":{"rendered":"
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THE PHILIPPINES\u2019 current account def<\/span>icit is seen narrowing further this year amid a more positive global outlook, Fitch Solutions\u2019 unit BMI said.<\/p>\n

In a report dated June 25, BMI lowered its current account def<\/span>icit forecast to 2.3% of gross domestic product (GDP) from 2.8% previously.<\/p>\n

This is narrower than last year\u2019s current account deficit which stood at 2.6% of GDP, but wider than the average of -0.4% from 2015-2019.<\/p>\n

The BSP projects a $4.7-billion current account def<\/span>icit for 2024, equivalent to 1% of GDP.<\/p>\n

\u201cA more optimistic global outlook was the main reason behind this revision. We initially anticipated a more significant downturn in worldwide demand,\u201d BMI said.<\/p>\n

\u201cHowever, the global economy has proven to be much more resilient, prompting us to pencil in a stronger (global) expansion of 2.4% in 2024 after initially projecting global GDP growth of 2.1% at the start of the year,\u201d it added.<\/p>\n

The latest data from the BSP showed that the current account de<\/span>f<\/span>icit stood at $1.7 billion in the first quarter, equivalent to -1.6% of GDP. This was lower than the $4.4-billion gap or -4.3% of GDP seen in the same period a year ago. <\/span><\/p>\n

\u201cRisks to our current account outlook lean towards a larger shortfall. Much hinges on trends in the global economy,\u201d it said.<\/p>\n

BMI said that it sees external demand weakening in the second half of the year, due to an expected economic slowdown in China, the United States, Japan, Hong Kong and Singapore.<\/p>\n

\u201cWhile external demand has held up relatively well in the f<\/span>irst half of the year, we think that it will slow in earnest in the latter half as major trading partners face domestic economic headwinds of their own,\u201d it said.<\/p>\n

BMI said the tourism sector\u2019s recovery may \u201cnot be as strong as the numbers suggest\u201d and may be the \u201cresult of an anomaly.\u201d<\/p>\n

\u201cInternational visitors are still 40% lower than prior to the pandemic even though revenues have already exceeded pre-pandemic levels. We have determined that this increase is due to a temporary change in spending patterns, driven by a backlog of travel demand after the pandemic,\u201d it said.<\/p>\n

The uptick in tourism revenues is expected to taper of<\/span>f soon, with some signs of a slowdown already emerging.<\/p>\n

\u201cAverage expenditure to date this year is roughly 5% less than in 2023, once inflation adjustments are made,\u201d BMI said.<\/p>\n

Foreign investments are also seen to remain muted this year, a trend seen in other countries in the region.<\/p>\n

\u201cWhile we are of the belief that extensive reforms implemented in recent years will indeed pay dividends, the prevailing environment of high interest rates will keep a lid on investment activity for now,\u201d BMI said.<\/p>\n

BMI data showed FDI as a share of GDP averaged 1.9% in the last four quarters, lower than the previous decade\u2019s average of 2.2%.<\/p>\n

The Bangko Sentral ng Pilipinas (BSP) has kept the key rate at a 17-year high of 6.5% since October 2023.<\/p>\n

In a separate report, BMI said that it expects the central bank to keep rates steady at its meeting on Thursday.<\/p>\n

This is in line with a BusinessWorld<\/i> poll conducted last week where all 15 analysts surveyed expect the Monetary Board to stand pat for a sixth straight meeting.<\/p>\n

\u201cGiven that the economy has remained fairly resilient thus far, the Bank will be in no hurry to cut rates until price pressures have eased more convincingly,\u201d BMI said.<\/p>\n

BMI said it is keeping its positive outlook for consumer spending in the Philippines despite elevated interest rates.<\/p>\n

\u201cEasing inflation and a tight labor market will support spending, as real wage growth returns to positive territory, which will support purchasing power over the year,\u201d it added.<\/p>\n

The BSP expects inflation to temporarily accelerate to above the 2-4% target until July but settle within target after. \u2014 Luisa Maria Jacinta C. Jocson<\/b><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

THE PHILIPPINES\u2019 current account deficit is seen narrowing further this year amid a more positive global outlook, Fitch Solutions\u2019 unit BMI said. In a report dated June 25, BMI lowered its current account deficit forecast to 2.3% of gross domestic product (GDP) from 2.8% previously. This is narrower than last year\u2019s current account deficit which [\u2026]<\/div>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","footnotes":""},"categories":[1],"tags":[13558,14644,15515,15776,6441,16965,1572,4778,745,1369],"class_list":["post-19476","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-account","tag-bworldonline","tag-current","tag-deficit","tag-further","tag-narrow","tag-philippines","tag-seen","tag-this","tag-year"],"yoast_head":"\nPhilippines\u2019 current account deficit seen to further narrow this year - Energy Buzz<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/energybuzz.ph\/philippines-current-account-deficit-seen-to-further-narrow-this-year\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Philippines\u2019 current account deficit seen to further narrow this year - Energy Buzz\" \/>\n<meta property=\"og:description\" content=\"THE PHILIPPINES\u2019 current account deficit is seen narrowing further this year amid a more positive global outlook, Fitch Solutions\u2019 unit BMI said. 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