THE country’s current account deficit narrowed in the first half of the year, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.
At $7.1 billion and equivalent to 3.2 percent of gross domestic product (GDP), the shortfall dropped by 17.8 percent from the $8.6 billion recorded a year earlier.
“The lower current account deficit emanated from the narrowing trade in goods deficit and the higher net receipts in the primary and secondary income accounts,” the central bank said.
“However, this was partly mitigated by the lower net receipts in trade in services,” it added.
Trade in goods and services totaled $31.5 billion and $7.2 billion, respectively, from $33.2 billion and $8.4 billion.
Meanwhile, primary income rose to $2.2 billion from $1.6 billion a year earlier.
Secondary income also improved to $15.0 billion from $$14.6 billion.
For the second quarter alone, the current account deficit widened to $5.1 billion, up 25.0 percent from the $4.1-billion deficit recorded in the same period last year.
This is equivalent to 4.6 percent of the country’s GDP, up from the previous 3.9 percent.
The central bank attributed the wider deficit to an expansion in the trade in goods gap and lower net receipts in trade in services.
“This was partly muted by higher net receipts in the primary and secondary income accounts,” the BSP said.
The trade in goods shortfall rose $16.8 billion from $16.1 billion recorded in April to June 2023, while the services deficit narrowed to $3.4 billion from $3.9 billion.
Primary and secondary income both accelerated to $905 million and $7.4 billion, respectively, from $883 million and $7.2 billion.
The central bank expects the current account deficit to narrow to $4.7 billion this year, equal to 1.0 percent of GDP, from the $11.2 billion registered in 2023.
It had previously projected a $6.1-billion gap, or 1.3 percent of GDP.
The current account deficit for 2025, meanwhile, is estimated to hit $2 billion — 0.4 percent of GDP and revised from $5.8 billion previously.
The projections were revised by BSP in June given improvements in the trade outlook.
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