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Friday, March 29, 2024

Current account deficit widened to $3.1 billion in first half

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The Philippines posted a current account deficit of $3.1 billion in the first six months, a significant increase from a shortfall of $133 million a year ago amid the widening trade deficit, data from the Bangko Sentral ng Pilipinas showed.

The first-half current account deficit was equivalent to 1.9 percent of the gross domestic product. It also matched the target of $3.1-billion deficit earlier set by the Bangko Sentral for this year.

“This outcome was due to mainly to the widening trade deficit in the trade-in-goods account and lower net receipts in the primary income account, which more than offset the higher net receipts in the trade-in-services and secondary income accounts,” the Bangko Sentral said.

The trade-in-goods deficit for the first half went up by 27.9 percent to $23.3 billion as imports of goods expanded 10.7 percent while exports dropped 1.6 percent.

Exports of goods declined to $25.3 billion in the first six months of 2018 from $25.7 billion in the same period last year. Contributing largely to the decrease in exports were lower shipments of coconut products (22.9 percent) and fruits and vegetables (16.4 percent).

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Imports of goods rose to $48.7 billion in the first six months from $44 billion in the same period in 2017. The 10.7-percent growth was attributed to higher imports of raw materials and intermediate goods, reflecting the robust expansion in domestic economic activity.

The 22.2-percent growth in imports of raw materials and intermediate goods, which totaled $18.5 billion in the first half, was due largely to the higher purchases of materials and accessories for the manufacture of non-consigned electronic products (133.8 percent) along with imports of manufactured goods (20.2 percent).

The balance of payments position in the first half yielded a deficit of $3.3 billion, or more than four times higher than the $706-million deficit recorded in the same period last year.

BoP summarizes the country’s economic transactions with the rest of the world.

The Bangko Sentral expects the BoP to post a deficit of $1.5 billion this year, higher than the actual deficit of $900 million in 2017. 

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