MANILA (Reuters) – The Philippine central bank on Friday released revised projections for the current account and balance of payments this year and for 2022, reflecting it said the global economy’s recovery as well as lingering pandemic-related risks.
The Bangko Sentral ng Pilipinas (BSP) now expects the country’s current account this year to post a deficit of $4 billion, or 1% of gross domestic product, revising its projection from a surplus equivalent to 0.9% of GDP.
For next year, it projected a current account deficit of $9.9 billion, or 2.3% of GDP, wider than its previous deficit forecast equivalent to 0.3% of GDP.
The balance of payments (BOP) is now projected to yield a narrower surplus of $1.6 billion, or 0.4% of GDP, this year, compared with a previous estimate of 1.1%.
The BOP surplus in 2022 is expected to be even narrower at $700 million, or 0.2% of GDP, from a previous forecast equivalent to 0.4% of GDP.
“The latest BOP assessment for 2021 factors in pockets of optimism amid encouraging economic outturns in recent months on the one hand, and the continued high uncertainty from pandemic-related challenges on the other hand,” the BSP said in a statement.
But overall, it said the latest set of projections took into account a global economic recovery that is broadly on track and indications that the spread of the highly transmissible COVID-19 Delta variant has been contained domestically.
The BSP, however, trimmed its year-end projections for gross international reserves to $111 billion and $112 billion next year, from $114 billion and $115 billion, respectively, to factor in some foreign loan repayments.
Cash remittances by Filipinos overseas, a key pillar of the consumption-driven domestic economy, were expected to grow 6% this year and 4% next year, reflecting rising demand for Filipino workers.
(Reporting by Neil Jerome Morales and Enrico Dela Cruz; Editing by Ed Davies)
