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By Chino S. Leyco, Reporter
THE Philippines’ current account surplus will
narrow in the coming months due to a slowdown in overseas
remittances and higher inflation, the Hong Kong and Shanghai Banking
Corp. (HSBC) said.
Despite a rebound in exports in April, Frederic
Neumann, HSBC economist said the country’s current account, which
tallies the Philippines’ external trade in goods and services,
would decline for the remainder of the year.
“This as remittances are no longer growing
sufficiently to compensate for the expanding trade deficit. Along
with elevated inflation readings, this should continue to weigh on
the peso,” Neumann said in a report.
Export growth rose 4.9 percent year on year in
April from a 6.6-percent contraction in March due to a less steep
fall in electronics shipments.
The recovery in export growth mirrors regional
trends whereby most countries have seen their shipments strengthen
in recent months, mostly on the back of strong demand from within
Asia and other emerging markets, Neumann said.
“However, the Philippines stands out as a
regional under-performer, suggesting that structural impediments to
the country’s competitiveness are holding back the sector,” he
added.
The Bangko Sentral ng Pili-pinas has projected a
current account surplus of $6.4 billion to $6.9 billion this year.
Japan-based investment bank Nomura earlier said
the Philippines’ current account surplus is expected to decline
this year, removing a strong support to the peso’s appreciation.
Nomura said the Philippine current account
surplus could go down to $5.4 billion this year from $6 billion last
year.
The investment bank however said the country’s
current account could reverse its direction toward an expanding
surplus as overseas economies gradually pick up.
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