By Lee C. Chipongian
The central bank reported that as of end-June, the country’s current account deficit fell to $1.7 billion versus same time in 2018 of $3.8-billion deficit on improved remittance inflows.
The balance of payments (BOP) quarterly report, released Friday by the Bangko Sentral ng Pilipinas (BSP), said that current account deficit narrowed because of the higher net receipts in the primary income of $2.5 billion from $1.5 billion, and of trade-in-services of $5.9 billion from $4.9 billion.
As for secondary income accounts, this increased slightly to $13.3 billion from $13.2 billion while the deficit in the trade-in-goods account went up to $23.5 billion from $23.3 billion.
BSP officials, led by Deputy Governor Francisco G. Dakila Jr. said overall, the BOP continued to post surpluses for the year. In the first half of 2019, the BOP position was $4.8-billion surplus, reversing last year’s $3.3 billion shortfall.
“The surplus was a result primarily of the marked increase in net inflows in the financial account combined with the narrowing of the deficit in the current account,” according to the BSP.
The BSP in June revised its BOP projections for 2019 to a surplus of $3.7 billion from its previous estimate of $3.5- billion deficit last November 2018. The revision was due to improved inflows and sustained favorable domestic growth outlook. The latest BOP surplus projection is equivalent to one percent of GDP while the current account deficit is 2.8 percent of GDP.
The BSP however estimates a higher current account shortfall of $10.1 billion for this year from its previous projection of $8.4-billion deficit.
As of end-July, the BOP surplus stood at $5.04 billion, an improvement compared to same time last year of $3.71 billion.
The BSP said the January-July BOP surplus was attributed partly to remittance inflows from overseas Filipinos during the first half of the year and net inflows of foreign direct investments during the first five months of the year, according to the BSP.