PHL current account deficit seen to further widen over medium term

THE PHILIPPINES’ current account deficit could further widen over the medium term as global trade uncertainties affect external demand, Fitch Solutions unit BMI said.

- - Katherine K. Chan

“We now expect the Philippines’ external position to deteriorate as trade fragmentation and its knock-on effects on global demand will weigh heavily on exports,” it said ina report.

BMI expects the current account deficit to average -2.8% of gross domestic product (GDP) over the next three years. This is wider than the -0.4% average during the 2015-2019 period.

It sees the current account gap to settle at -3% of GDP this year, before narrowing to -2.8% in 2026, -2.6% in 2027, and -2.3% in 2028.

Data from the Bangko Sentral ng Pilipinas (BPS) showed the current account deficit widened to -3.7% of GDP in the first quarter, versus -1.9% in the same period in 2024. The BSP expects the current account deficit to be -3.3% this year, and -2.5% in 2026.