MANILA: The Philippines current account deficit for 2024 will be much wider than previously expected, the central bank said on Friday, and the gap is projected to increase in 2025 due to geopolitical shocks and possible shifts in US trade policies.
The current account, which measures the flow of goods, services and investments in and out of the country, is now forecast to post a $10.4 billion deficit in 2024, equivalent to 2.2% of gross domestic product (GDP), larger than the $6.8 billion shortfall projected in September.
The wider-than-expected deficit for 2024 would still be lower than the previous year, when the current account deficit was $11.8 billion or 2.7% of GDP.
For 2025, the current account deficit is seen widening from 2024 levels to $12.1 billion, or 2.4% of GDP, driven by expectations of trade barriers and uncertainty about the policies of incoming US President Donald Trump, the central bank said in a statement.
The Philippines’ overall balance of payments (BOP) position is expected to be in surplus for 2024 and 2025, supported by sustained inflows in the financial account.
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The BOP surplus, projected at $3.5 billion for 2024, is projected to narrow to $2.1 billion this year.
“There is still scope for global trade to pick up in 2025 given an environment of moderating global inflation and improved business activity,” the central bank said.
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