Current account deficit reaches $234 M in H1

The country’s current account deficit amounted to $234 million as of end-June this year, lower compared to the same time last year of $424 million, based on data from the Bangko Sentral ng Pilipinas (BSP).

During the first half period, the overall balance of payments (BOP) was in a deficit of $706 million versus a surplus of $634 million a year ago. However in the second quarter, the BOP improved to a surplus position of $289 million from the first quarter’s deficit, and this was despite slower net inflows that declined to $688 million which are net borrowing by residents in the financial account data. The BSP said residents repaid and prepaid external debts while others invested in foreign equities.

For the second quarter, the current account was in a surplus of $15 million from a deficit of $1.3 billion same time in 2016. “Global economic conditions continued to improve as indicators of activity signaled sustained expansion in the US, euro area, and China even with slower growth in Japan and India,” according to a BSP second quarter BOP report released on Friday. “Overall growth prospects for the global economy remained broadly positive which helped improve the country’s external trade and sustain investor confidence on the Philippine economy.”

The central bank noted that the current account deficit which was 0.2 percent of GDP in the January-June period was an improvement compared to the 0.3 percent-to-GDP deficit in 2016. “The improvement in the current account stemmed mainly from increased net receipts in the trade-in-services, and secondary and primary income accounts which partly negated the widening deficit in the trade-in-goods account,” said the BSP.