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BSP sees lower deficit in BOP for 2023 at $1.6B

Philippine monetary authorities forecast lower deficit for the 2023 balance of payment (BOP) position on account of expected narrower trade gap and better services exports and imports, among others.

In a virtual briefing on Friday, Bangko Sentral ng Pilipinas (BSP) officer-in-charge for the Monetary Policy Sub-Sector Dennis Lapid said the latest BOP projection is at USD1.6 billion deficit, better than the previous forecast of USD5.4 billion deficit.

‘The overall outlook or picture for the external environment, particularly for external economic activity, continues to suggest that global GDP (gross domestic product) will continue to be subdued, particularly for this year,’ he said.

In 2022, the country registered a BOP deficit of USD7.3 billion, a reversal from the USD1.3 billion surplus in the previous year.

Based on the latest projection, the current account (CA) is seen to post a lower deficit of USD17.1 billion from USD19.9 billion previously.

Goods exports and imports projections were kept at 3 percent and 4 percent, respectively.

However, services exports are seen to rise by 17 percent from 15 percent and the services imports by 11 percent from 8 percent in the previous BOP forecasting round in the last quarter of 2022.

Inflows from overseas Filipino workers (OFWs) are seen to post a slower growth of 3 percent from 4 percent previously and Lapid attributed this to projections of slower growth in countries where the OFWs are based.

He explained that these projections are based largely on the global growth forecast of the International Monetary Fund (IMF), which sees a subdued output for this year.

He said key downside risks for the domestic economy include the continuation of the elevated inflation rate in most of this year and the possible easing of pent up demand as economic situation normalizes.

These factors are seen to be countered by the stronger-than-expected rebound in travel receipts as more tourists flock to the Philippines and the expected deceleration of inflation rate towards the end of the year.

Source: Philippines News Agency