By Benjamin Cuaresma
MANILA — The Bangko Sentral ng Pilipinas (BSP) has significantly revised its balance of payments (BOP) projections for 2026 and 2027, warning that prolonged global economic uncertainty, weaker investment inflows, and elevated energy costs will continue to challenge the country’s external financial position.
Under its latest macroeconomic outlook, the central bank expects the Philippines to post a $10.7-billion BOP deficit this year, substantially higher than the $7.8-billion estimate issued in the first quarter. The revised projection represents 2.1 percent of the country’s gross domestic product (GDP).
For 2027, the BSP also widened its forecast to an $11-billion deficit, up from the previous $8.5-billion estimate, likewise equivalent to 2.1 percent of GDP.
The balance of payments summarizes the country’s transactions with the rest of the world and serves as a key indicator of the economy’s external strength.
According to the BSP, the Philippines’ external sector will continue to face pressure from higher import costs, tighter global financial conditions, and subdued foreign capital inflows despite the economy’s underlying resilience.
“The Philippines’ external position is expected to remain under pressure as cost-driven trade imbalances and tighter financial conditions continue to shape both current account and financing dynamics,” the BSP said.
Despite the wider BOP deficit, the central bank expressed optimism over improvements in the country’s current account balance, driven largely by slower import growth amid easing domestic demand.
The BSP lowered its 2026 current account deficit forecast to $18 billion, or 3.6 percent of GDP, from the previous estimate of $20.3 billion. For 2027, the projected deficit was likewise trimmed to $19.7 billion, equivalent to 3.7 percent of GDP.
Import growth expectations for 2026 were reduced to 4 percent from 6 percent, while export growth remained unchanged at 3 percent, reflecting softer domestic consumption and moderating global demand.
The central bank also revised downward several key foreign exchange earning sectors.
Cash remittances from overseas Filipino workers are now projected to grow by 2.7 percent, slightly below the previous 3-percent estimate. Revenue growth from the country’s business process outsourcing (BPO) industry was likewise lowered to 2.5 percent from 4 percent, while services export growth was cut to 3 percent.
Meanwhile, travel receipts are expected to grow by only 1 percent this year as the tourism industry’s recovery continues at a measured pace.
Investment projections were likewise scaled back, with expected net foreign direct investments (FDI) for 2026 reduced to $7 billion from $7.5 billion. Forecasts for foreign portfolio investments (FPI) were also sharply lowered to $1.8 billion, reflecting continued investor caution amid high global interest rates and financial market volatility.
The BSP likewise downgraded its forecast for the country’s gross international reserves (GIR) to $104 billion by end-2026, down from its earlier projection of $111 billion.
Despite the more cautious outlook, the central bank believes the country’s external position will gradually strengthen beyond 2026 as global conditions improve, structural reforms gain traction, and investment opportunities expand.
Officials said potential inclusion in major global bond indices, continued infrastructure investments, and sectoral development initiatives are expected to support a gradual recovery in foreign capital inflows beginning next year.
While external risks remain elevated, the BSP maintained that the Philippine economy possesses sufficient fundamentals to navigate a challenging global environment and sustain long-term growth.
ia/xf
