Current account reports surplus, but balance of payments in deficit

December 15, 2017

The current account reversed to a surplus of  $554 million in the third quarter from a deficit of 30 million during the same period last year, the Bangko Sentral ng Pilipinas (BSP) said Friday.

But the current account surplus was not adequate to offset the increased net outflows in the financial account, resulting in a deficit in the overall balance of payments position (BOP) in the third quarter.

The country’s BOP position reversed to a deficit of $662 million, after posting a surplus of $289 million in the second quarter.

The overall BOP position for 2017 is seen to post a higher-than-expected deficit of  $1.4 billion.  This is due to the projected greater net outflow in the financial account, even as the current account is expected to show a lower deficit, the BSP said.

Because of this development, the central bank sees the current account posting  a deficit of $0.1 billion, lower than the previous projection of $0.6 billion, to reflect the improvement in the trade balance.

This deficit represents less than 0.1 percent of gross domestic product (GDP). DMS