By Doris Dumlao-Abadilla, Philippine Daily Inquirer
The Philippines may incur a shortfall of as much as $9.8 billion in its economic transactions with the rest of the world this year, over three times larger than the level at which the Bangko Sentral ng Pilipinas (BSP) aims to cap the current account deficit, a top economist from ING Bank said.
This deterioration in the country’s current account position is seen as a big drag on the peso, which is already trading at its 13-year lows against the dollar. In the first half, the country’s current account position posted a deficit of $3.1 billion, which already equaled the BSP’s full-year cap.
“The outlook is unlikely to show any improvement. We expect this year’s current account deficit to amount to between $7.7 billion and $9.8 billion, or between 2.3 percent and 2.9 percent of GDP (gross domestic product),” ING Philippine economist Joey Cuyegkeng said in a research note on Monday.