Debt watcher Fitch Ratings predicted the Philippines’ current account will reverse to a slight deficit in 2017, as imports rise amid strong demand by the expanding economy.
Fitch said in a report Wednesday the country’s current account would likely reach around -0.3 percent of GDP in 2017, from the previous year’s +0.2 percent of GDP in 2016. Fitch said the number would further decline to around -0.7 percent of GDP in 2018.
It said the deficit was “based on rising capital-goods imports due to the authorities’ higher infrastructure spending plans.”
Bangko Sentral also projected that current account, one of the major components of the balance of payments, would reverse to a deficit of $600 million this year from the actual surplus of $600 million last year.
Fitch said the Philippines’ “BBB-” rating and its positive outlook was supported by continued strong macroeconomic performance, a net external creditor position and government debt levels that were below the ‘BBB’ median.