NextGen Day

MANILA, Philippines — The Philippines’ current account deficit is expected to widen in the future years, but a senior central bank official claims that structural inflows would compensate.

Zeno Ronald R. Abenoja, Managing Director of the Bangko Sentral ng Pilipinas (BSP) Department of Economic Research, said in a press conference on Friday that the country has had CA deficits in recent years.

This, however, is not a negative trend because it reflects increasing product importation as a result of increased infrastructure spending, according to Abenoja.

“Given that these investment expenditures over the past years have the potential to improve the economy’s potential capacity,” he said, “We expect that the subsequent increase in exports and investment capital inflows will help alleviate the pressure on (the) trade gap, as well as concerns about financing the current account.”

He also attributed the increase in the CA deficit to increasing commodities costs in the global economy in recent years.

The CA deficit, according to Abenoja, might be covered by ongoing strong remittance inflows from abroad Filipino workers, earnings from the BPO industry, and travel receipts as the country welcome more international visitors and foreign investments.

The Monetary Board of the BSP, which sets policy, has approved the latest balance of payment (BOP) predictions for 2022 and 2023.

The newest BOP forecast for the year is a USD6.3 billion shortfall, up from USD4.3 billion previously.

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