The country’s current account deficit surged 41.4% to $17.5 billion in 2024, driven by a widening merchandise trade gap, the Bangko Sentral ng Pilipinas (BSP) reported.
The shortfall, equivalent to -3.8% of gross domestic product (GDP), exceeded the central bank’s forecast of $10.4 billion (-2.2% of GDP) and marked the largest deficit since 2022’s record $18.3 billion.
The trade deficit expanded 4.1% to $68.7 billion, as imports rose while exports weakened. Inbound shipments climbed 2% to $123.8 billion, fueled by higher purchases of rice, iron and steel, and office and electronic data processing machines.
The BSP noted that demand for construction materials increased alongside infrastructure spending under the government’s Build, Better, More program.
Exports, meanwhile, slipped 0.4% to $55 billion, with electronic products, copper metal, and other mineral shipments posting declines.
Net receipts from trade in services dropped 19.8% to $14.6 billion, as a 24% rise in payments outpaced a 7.5% increase in receipts. However, net primary income receipts grew 14.4% to $5 billion, while net secondary income receipts edged up 1.8% to $31.7 billion.
The financial account saw net inflows of $17.6 billion, a 29.6% increase from 2023, reflecting higher net borrowing by Philippine residents from foreign sources.
In the fourth quarter alone, the current account deficit swelled to $4.6 billion, quadrupling the $1 billion shortfall in the same period of 2023. The BSP attributed this to a larger trade gap and weaker net receipts from services and primary income.
The balance of payments surplus for the full year narrowed sharply to $609 million from $3.7 billion in 2023. In the final quarter, the BOP position swung to a $4.5 billion deficit, reversing the $1.9 billion surplus a year earlier.
Despite the deteriorating external position, the BSP said the country’s financial buffers remain intact, supported by remittance inflows and gross international reserves.
The central bank pledged to closely monitor external risks, including trade dynamics and global financial conditions.
