THE current account deficit more than doubled to $2.5 billion in 2017 from the $1.2-billion gap a year ago on the back of the widening trade-in-goods deficit, the Bangko Sentral ng Pilipinas said Friday.
Data showed the deficit was the biggest since 1999, when the current account shortfall stood at $2.85 billion. The current account is one of the main components of the balance of payments.
Bangko Sentral assistant governor Francisco Dakila Jr. said in a briefing Friday the higher trade deficit more than offset the increased net receipts in the trade-in-services, and secondary and primary income accounts during the year.
The trade-in-goods deficit for 2017 rose 15.9 percent to $41.2 billion as the growth in imports of goods of 14.2 percent outpaced that of exports of goods at 12.8 percent
“The widening of trade-in-goods deficit was reflective of the continued growth of the economy as the growth in imports was driven by demand for goods to be used for infrastructure projects of the government,” Dakila said.
Exports of goods rose to $48.2 billion in 2017 from $42.7 billion a year ago, driven by continued demand from the country’s trading partners such as China, Hong Kong, South Korea and some countries in Europe.
The expansion in exports of goods was due largely to higher shipments of manufactured items and mineral products, which registered double-digit growth of 10.3 percent and 72.4 percent, respectively.
Imports of goods aggregated $89.4 billion in 2017 from $78.3 billion a year ago. The upturn was accounted for mainly by higher imports of raw materials and intermediate goods (16.7 percent), and mineral fuels and lubricant (32.9 percent).
Dakila expressed optimism that the current account would return to surplus in the coming years, especially with the recovery of the Philippines’ main trading partners, including the United States.
“That will provide support to the country’s exports,” Dakila said.
The balance of payments position in 2017 registered a deficit of $863 million, more than double the $420-million gap a year ago, due to the increased deficit in the current account.
The BoP, however, yielded a surplus of $505 million in the fourth quarter, after recording a deficit of $662 million a quarter ago. The surplus was also a reversal from the $2.1-billion deficit registered in the same quarter a year ago.