Philippines revises 2022, 2023 current account projections

MANILA – The Philippine central bank on Friday revised its current account projections for 2022 and 2023 to take into account the weaker global growth outlook, elevated inflation and the domestic economy’s pace of expansion.

The Bangko Sentral ng Pilipinas now expects a current account deficit of $20.5 billion, or 5.1 percent of gross domestic product (GDP), this year, compared with its previous projection of $20.6 billion, or 5 percent of GDP.

For 2023, it expects a current account deficit of $19.9 billion, or 4.7 percent of GDP, compared with its earlier deficit forecast of $20.1 billion, or 4.5 percent of GDP.

The central bank said the revisions reflected intensifying external risks from a more subdued global growth outlook, persistent inflation pressures, the protracted Ukraine-Russia conflict, and supply chain disruptions.

Central bank officials also took into consideration the positive outlook for the Philippine economy which was on track to meet its growth target of 6.5 percent-7.5 percent this year, with the pace of expansion forecast to remain at least 6 percent next year.

The central bank revised its balance of payments (BOP) forecasts for both years, which are now expected to show a deficit of $11.2 billion in 2022 and $5.4 billion in 2023, wider than previous estimates.

Forecasts for gross international reserves were lowered to $93 billion for both 2022 and 2023, from the central bank’s previous estimate of $99 billion and $100 billion respectively.

Remittances from Filipinos working and living abroad were seen on track to grow 4 percent this year and next.