Impact of the challenging global economy made the Bangko Sentral ng Pilipinas (BSP) cut its balance of payment (BOP) assumption for 2016 to a surplus of USD500 million from USD2 billion surplus earlier.
"I think we need to emphasize that 2016, especially in the last quarter of the year, has been particularly challenging. There was a lot of unexpected developments in the market, most of which are anticipated but not in terms of the timing as well as the magnitude of those adjustments," BSP Deputy Governor Diwa Guinigundo said in briefing Friday.
Other changes in the central bank's economic assumption included the current account surplus, which last May was at USD5.8 billion but now at USD2.5 billion.
The financial account was slightly revised upwards to USD600 million from USD500 million earlier.
Gross International Reserves (GIR) assumption is now at USD83.7 billion from USD84.8 billion.
Guinigundo said the changes had been considered early on, citing that negative economic developments had been experienced since early this year.
He noted in particular the drop in the current account surplus because of the rising import in line with the higher demand of the domestic economy.
The country has been posting current account surpluses for more than a decade now but this has lessened on increased demand of the economy.
As of end-September this year, the current account registered a USD1.6 billion surplus, lower than year-ago's USD6.2 billion surplus.
However, the surplus for the third quarter alone rose to USD979 million from the USD969 million same period in 2015.
Guinigundo said anticipations for additional hikes in the Federal Reserve's key rates after the December 2015 increase resulted in volatilities in the global financial market and the depreciation of currencies such as the Philippine peso against the greenback.
He said success of the Donald Trump in US' Nov. 8 national polls and his pronouncements to increase infrastructure spending to boost economic growth bolstered the dollar's strength and further hurt other currencies.
"While macroeconomic fundamentals of many emerging markets continue to be strong even without doing anything their respective policies started to weaken," he added.
For 2017, the central bank foresees a BOP surplus of USD1 billion; current account surplus of USD 0.8 billion; capital account surplus of USD0.1 billion, and financial account surplus of USD 1.1 billion.
Source: Philippines News Agency