Manila: The Bangko Sentral ng Pilipinas (BSP) on Monday revised its balance of payments (BOP) projections for 2025 and 2026, considering global uncertainty, increased geopolitical risks, and investor confidence's impact on the BOP outlook. The BOP summarizes a country's economic transactions with the rest of the world over a specific period and can be in surplus, deficit, or balance.
According to Philippines News Agency, the BSP expects a BOP deficit of USD6.3 billion this year, larger than the earlier USD4 billion deficit projection. For 2026, the BSP anticipates a reduced deficit of USD2.8 billion. The outlook reflects a continued current account shortfall and moderating financial flows, offset by global trade uncertainty, heightened geopolitical risks, and weakened investor confidence. The current account is projected to remain in deficit at around 3 percent of GDP for 2025 and 2026, indicating a gap in savings over investment amid global uncertainties.
The BSP forecasts the current account shortfall to reach USD16.3 billion this year, down from the previously estimated USD19.8 billion deficit, with a projected shortfall of USD13.6 billion next year. Goods exports are expected to decline by 1 percent this year before growing by 2 percent in 2026, while imports are forecast to grow by 1 percent in 2025 and 2 percent in 2026. Goods exports face challenges from global trade uncertainty, lagging competitiveness, and semiconductor industry constraints. Trade diversion offers opportunities, but logistical inefficiencies and workforce limitations remain barriers.
Services exports are likely to expand by 6 percent this year and further accelerate to 8 percent in 2026. Outsourcing revenues are supported by stable demand for contact center services, though they face uncertainties due to US job reshoring initiatives and local talent shortages. Tourism receipts are expected to rise by 10 percent in 2025 and 11 percent in 2026 due to improvements in airport infrastructure and increased accommodation availability, though competition from other destinations and rising transport costs may temper recovery.
Overseas Filipino remittances are projected to increase by 2.8 percent in 2025 and 3 percent in 2026, driven by strong labor demand for Filipino workers in key sectors and aging populations in host countries. However, protectionist policies in some host countries present emerging risks.
Foreign investment inflows remain positive but subdued, influenced by policy uncertainty and the global slowdown. The government's push for accelerated infrastructure development, expanded fiscal incentives, and investment-enhancing reforms is expected to attract long-term investment. The country's gross international reserves are likely to reach USD104 billion in 2025 and USD105 billion in 2026, providing sufficient liquidity to cushion the economy against external headwinds.
The BSP emphasizes the limitations of the forecasts, given the evolving external landscape, and will continue to monitor external developments and risks and their potential impact on price and financial stability objectives.
