UPDATE 1-Philippine current account gap to widen in 2019 on weak exports

* Current account deficit seen at 2.8 pct of GDP in 2019
* BOP position to revert to surplus of $3.7 bln in 2019
* Wider c/a deficit due to weak exports growth

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MANILA, June 14 (Reuters) - The Philippines is expected to
end the year with a wider current account deficit, the central
bank said on Friday, as the outlook for exports deteriorated due
to weaker global demand.
This year's current account deficit will likely reach $10.1
billion, or 2.8 percent of gross domestic product, the central
bank said, wider than an earlier forecast of an $8.4 billion gap
and greater than last year's $7.9 billion deficit.
But strong foreign portfolio inflows and foreign direct
investments will strengthen the country's balance of payments
(BOP) position. The central bank forecast a surplus of $3.7
billion this year from a previous estimate of a $3.5 billion
deficit.
Imports were seen growing 7.0% in 2019. While slower than an
earlier estimate of 9.0%, it would still outpace the downwardly
revised growth forecast of 2.0% for exports, the central bank
said.
"We are seeing weaker economic activity and that's pushing
down the global demand for exports," said Dennis Lapid, central
bank director for economic research.
The Philippines has recorded large trade gaps since last
year, widening its current account deficit and adding pressure
on the peso PHP= , which weakened to 52.02 to the dollar after
the central bank projected a wider deficit.
Michael Ricafort, economist at Rizal Commercial Banking
Corp, said the improvement in the country's BOP's position - a
reflection of sustained foreign exchange inflows - should
provide greater support for the currency.
Central bank Deputy Governor Diwa Guinigundo said trade
deficits were to be expected as the government continues to
spend more on infrastructure meant to support growth and
strengthen the economy's buffers against global economic
uncertainties.
"Precisely because we continue to spend more and more on
infrastructure...we should be able to build a critical mass of
capacity for exports and more stable imports so that the current
account will be more or less stable at below 3 percent,"
Guinigundo said.
The central bank has started to unwind some of its policy
tightening last year when it cut its benchmark interest rate
PHCBIR=ECI by 25 basis points in May and announced a
three-step reduction in banks' reserve requirement ratio to
boost growth.