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CURRENT ACCOUNT GAP WIDENS TO $17.5B IN ’24 www.businessmirror.com.ph
Saturday, March 15, 2025 Vol. 20 No. 154
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AN aerial view of the Port of Manila, the Philippines’ largest cargo hub, highlights the country’s expanding role in global trade. Despite economic uncertainties, the DHL Trade Atlas 2025 report forecasts significant trade growth for the Philippines over the next five years, driven by supply chain diversification and rising exports. ALEXEY KORNYLYEV | DREAMSTIME.COM
P25.00 nationwide | 16 pages | 7 DAYS A WEEK
ALEXEY NOVIKOV | DREAMSTIME.COM
POLICY CHANGES WILL ENABLE PHL TO SURF TECH WAVE–NEDA
By Bless Aubrey Ogerio
T
T
By Reine Juvierre S. Alberto
KEY INSIGHTS
HE Philippines’ current account deficit widened to $17.5 billion in 2024, the second highest recorded since 2022, according to the Bangko Sentral ng Pilipinas (BSP). Data from the BSP showed the current account deficit settled at $17.5 billion in 2024, equivalent to -3.8 percent of the GDP. The highest current account deficit was recorded in 2022, when it reached $18.3 billion. The 2024 full-year current account deficit expanded by 41.4 percent from $12.4 billion in 2023, which is -2.8 percent of the GDP. This also exceeded BSP’s projections of a $10.4-billion current account deficit for 2024, equivalent to -2.2 percent of the GDP. The lower net receipts in trade in services and a higher deficit in trade in goods caused the higher current account deficit, the BSP said. “However, this was offset partly by higher net receipts in the
DEFICIT BREAKDOWN n Total Current Account Deficit: $17.5B (-3.8% of GDP) • 41.4% increase from $12.4B (-2.8% of GDP) in 2023 • 2nd highest deficit on record (after $18.3B in 2022) n BSP’s 2024 projection: $10.4B (-2.2% of GDP) • Actual deficit exceeded forecast by 68% BSP ON THE RISING DEFICIT: “The increased deficit was driven by a larger KEY CONTRIBUTORS merchandise trade gap and lower net n Trade in Goods Deficit: $68.7B receipts in trade in services and primary income accounts. However, this was n Trade in Services Net Receipts: $14.6B partially offset by higher net receipts in n Primary Income Net Receipts: $5B the secondary income account.” n Secondary Income Net Receipts: $31.7B
primary and secondary income accounts,” it added. The country’s trade in goods deficit widened by 4.09 percent to “The increased deficit was driv$68.7 billion in 2024 from $66 bilen by a larger merchandise trade lion in 2023. gap and lower net receipts in trade Net receipts in trade in services in services and primary income acaccount decreased by 19.78 percent counts. However, this was partially to $14.6 billion from $18.2 billion. offset by higher net receipts in the Primary income net receipts secondary income account,” the rose by 16.27 percent to $5 billion Central Bank said. in 2024 from $4.3 billion in the Meanwhile, the 2024 full-year previous year. capital account recorded net reMeanwhile, secondary income ceipts of $72 million in 2024. This net receipts inched up by 1.92 peris 2.9 percent lower than the $74 cent year-on-year to $31.7 billion million in 2023 due to lower net rePart I – The Global Trade Landscape 2. Trade Growth by Country and Region 31 from $31.1 billion. ceipts in the national government’s For the fourth quarter alone, other capital transfers. the current account deficit swelled The financial account also fourfold to $4.6 billion from $1 bilposted $17.6 billion in net inflows lion in the same quarter in 2023. (or net borrowing by residents
from the rest of the world) in 2024. This increased by 29.6 percent from the $13.6 billion net inflows in 2023, driven by the reversal of the portfolio investment account to net inflows (from net outflows) and higher net inflows in the direct investment account. Further, the country’s gross international reserves (GIR) amounted to $106.3 billion as of end-2024. This is higher than the $103.8 billion level recorded as of end-2023. In terms of the Philippine peso, the currency averaged P57.29/US$1, reflecting a 2.9-percent depreciation from the 2023 average of P55.63/US$1.
Report: PHL trade to expand despite global headwinds FIGURE 2.2: FORECAST TRADE GROWTH SPEED AND SCALE, 2024 – 2029 FORECAST TRADE GROWTH SPEED AND SCALE, 2024-2029 16% 16%
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Zimbabwe
Continued on A2
WOMEN INSPIRING WOMEN SM’s International Women’s Day Summit champions empowerment and inclusion. The 5th annual International Women’s Day Summit, “Women Inspiring Women,” featured 14 influential women leaders. This event, held on March 7, 2025, at the Samsung Hall in SM Aura, celebrates female empowerment. In the photo: Unprude founder Dr. Rica Cruz, Connected Women co-founder Gina Romero, Canon Europe Ambassador Chiara Negrello, content creator Small Laude, SM Group Sustainability Champion Jessica Bianca Sy, Wildflour Chief Executive Officer Ana Lorenzana de Ocampo, Happy Skin co-founder Jacqe Gutierrez, and moderator and United Nations (UN) Women National Goodwill Ambassador Karen Davila. SM SUPERMALLS
Sudan
Georgia 12% 12%
Speed: trade volume growth rate (%)
HE Philippines has been cited as one of the 30 countries in the world that will see trade growth over the next five years despite “unprecedented uncertainty” on the potential new tariffs, the DHL Trade Atlas 2025 report noted. “During the next five years, India, Vietnam, Indonesia, and the Philippines are forecast to rank among the top 30 for both speed and scale of trade growth,” it said. Despite the Philippines’ electronics-centered manufacturing sector receiving “more limited” benefits from supply chain diversification thus far, the DHL report noted that the Philippines will see “substantial trade growth.” “Indonesia and the Philippines, like Vietnam, have substantial potential to benefit from supply chain shifts and diversification strategies,” the report noted.
Madagascar Benin Gambia Niger 8% 8%
Guyana
Moldova
Tajikistan Central African Republic Burundi
Cabo Verde Togo
Haiti
Botswana
Senegal
Cambodia
Tanzania (United Republic of)
Bosnia and Uganda Herzegovina Guinea Mongolia Mozambique
KEN LEE, CEO for Asia Pacific, DHL Express: “The Philippines has a diverse and growing economic landscape. Manufacturing, particularly semiconductors, electronics, and automobiles, is picking up.... The country is one to watch.”
Philippines
Bangladesh Egypt
India Indonesia Viet Nam
Czechia United Arab Emirates Malaysia Singapore Saudi Arabia Thailand Poland Russian Federation Mexico Türkiye Hong Kong SAR (China) Taiwan (China) Korea (Rep. of) China Brazil France Australia United Belgium Germany States Spain Japan Netherlands
4% 4%
United Kingdom
0% 0%
10
100
1,000
10,000
Italy
100,000
Canada
1,000,000
Scale: absolute change in trade volume, millions of U.S. dollars (log scale) Speed Top 30
Scale Top 30
India, Viet Nam, Indonesia, and the Philippines are forecast to rank among the top 30 countries for both the speed and the scale of trade growth over the next five years. Data Sources: Economist Intelligence Unit, IMF Direction of Trade Statistics, IMF World Economic Outlook, Oxford Economics, and S&P Global Market Intelligence. Note: Countries with negative forecast growth are omitted from this figure.
Source: DHL Trade Atlas 2025
By Andrea E. San Juan
HE ability to adapt to emerging technologies has long defined economic powerhouses—a path the Philippines must take by investing in its people and industries, the country’s socioeconomic planning head said. National Economic and Development Authority (Neda) Secretary Arsenio Balisacan emphasized the need for policies that BALISACAN: “Our country’s strengthen human capital develability to learn, adapt, and scale up emerging technologies will opment, drive innovation and credepend on its ability to ride ate high-quality jobs to keep the the waves of change to create a country competitive. sustainable future.” “Without policy changes, the Philippines may face increased distress, disasters, slow progress, and widening inequality,” Balisacan said last Thursday as a lead discussant in a conference by the National Research Council of the Philippines.
Ken Lee, CEO for Asia Pacific, DHL Express, said at a virtual media briefing on Friday that the Philippines has a “diverse and growing” economic landscape. “Manufacturing, in particular, semiconductors and electronics, automobiles, are all picking up with year-on-year import and export Continued on A2
TENSION IN DAVAO: RESIDENTS RUSH TO DUTERTE’S HOME OVER ALLEGED SEARCH WARRANT Neighbors of former President Rodrigo Duterte gathered
outside his residence in Davao City on Thursday night following rumors that police were set to execute a search warrant and “plant evidence” against him. The Davao Regional Police and Davao City Police have denied any plans for a raid. Story on A4. MANUEL CAYON
PESO EXCHANGE RATES n US 57.3360 n JAPAN 0.3881 n UK 74.2731 n HK 7.3773 n CHINA 7.9149 n SINGAPORE 42.9226 n AUSTRALIA 36.0185 n EU 62.2382 n KOREA 0.0395 n SAUDI ARABIA 15.2916 Source: BSP (March 14, 2025)