BSP revises balance of payments outlook for 2025, 2026 

The Bangko Sentral ng Pilipinas (BSP) on Monday revised the balance of payments (BOP) projection for 2025 and 2026 to take into account the impact of global uncertainty, heightened geopolitical risks, and investor confidence on the BOP outlook, according to a report by Philippine News Agency.

The BOP is a summary of the economic transactions of a country with the rest of the world for a specific period.

The overall position can be in surplus, deficit or balance.

In a statement, the BSP said the BOP is expected to register a deficit of USD6.3 billion this year, bigger than the earlier USD4 billion deficit projection.

For 2026, the BSP expects the BOP to register a lower deficit of USD2.8 billion.

"This outlook reflects a continued current account shortfall and moderating financial flows. While the domestic economy benefits from steady growth, low inflation, and ongoing structural reforms, these are offset by global trade uncertainty, heightened geopolitical risks, and weakened investor confidence," the BSP said.

For 2025 and 2026, the BSP expects the current account to remain in deficit at around 3 percent of gross domestic product, indicating a gap in savings over investment amid global uncertainties.

The BSP projects the current account shortfall to reach USD16.3 billion this year, down from the USD19.8 billion deficit earlier estimated.

For next year, the current account shortfall is projected to reach USD13.6 billion.

Goods export is forecast to decline by 1 percent this year before growing by 2 percent in 2026.

Imports, on the other hand, are forecast to grow by 1 percent in 2025 and 2 percent in 2026.

"Goods exports continue to face headwinds from global trade uncertainty, lagging competitiveness, and constraints in the semiconductor industry. While trade diversion offers opportunities, logistical inefficiencies and workforce limitations continue to raise barriers," the BSP said.

"Meanwhile, stable domestic demand and infrastructure spending support the growth in imports, but import value is tempered by declining global commodity prices, particularly for oil," it added.

The BSP said services exports would likely expand by 6 percent this year and further accelerate to 8 percent in 2026.

"The services trade remains broadly resilient, although downside risks persist. Outsourcing revenues are supported by stable demand for contact center services, yet they confront uncertainties due to US job reshoring initiatives and local talent shortages," it said.

Tourism receipts will likely increase by 10 percent in 2025 and 11 percent in 2026 due to the improvements in airport infrastructure and greater availability of accommodation, though growing competition from other destinations and rising transport costs may temper the pace of recovery.

Overseas Filipino (OF) remittances are projected to increase by 2.8 percent in 2025 and 3 percent in 2026, supported by strong labor demand for Filipino workers in key sectors as well as by the aging populations in host countries.

The BSP however noted that the rise of protectionist policies in some host countries presents emerging risks.

According to the BSP, foreign investment inflows remain positive but subdued, as policy uncertainty and the global slowdown weigh on investor sentiment.

The government’s push for accelerated infrastructure development, expanded fiscal incentives, and investment-enhancing reforms – including the CREATE MORE Act and the Capital Markets Efficiency Promotion Act, however, is expected to help attract long-term investment.

Meanwhile, the country's gross international reserves will likely reach USD104 billion in 2025 and USD105 billion in 2026.

The BSP said reserves are expected to remain ample, providing sufficient liquidity to cushion the economy against external headwinds.

"The BSP emphasizes the limitations of the forecasts, given the evolving external landscape. The BSP will continue to closely monitor external developments and risks, and their potential impact on the fulfillment of its objectives for price and financial stability," it said.