MANILA, Oct. 1 (Xinhua) -- The Philippines' Balance of Payments (BOP) is projected to remain in deficit over the next two years, driven by sustained pressures on the current account, the Philippine central bank said on Wednesday.
According to the Bangko Sentral ng Pilipinas (BSP), the current account shortfall is expected to stay at around 3 percent of the gross domestic product (GDP) in 2025 and 2026.
"These reflect a widening trade-in-goods gap, subdued services receipts, and restrained capital inflows amid global uncertainty and shifting trade policies," the BSP said in a statement.
The BSP said that goods exports and imports are expected to remain sluggish, driven by softening global demand, easing commodity prices, and a tempered domestic growth momentum.
"Infrastructure investments, potential trade diversion, and efforts to diversify export and import partners may help cushion external shocks," the BSP added.
However, it said that structural constraints, such as logistical inefficiencies, skills mismatches, and elevated input costs, continue to weigh on export competitiveness.
Growth in services exports, particularly in business process outsourcing and tourism, is expected to moderate as the sector contends with uncertainties surrounding U.S. reshoring policies and weakening inbound travel.
Nevertheless, the BSP said that overseas Filipino remittances are expected to remain a resilient source of external support, underpinned by strong global labor demand and sustained confidence in formal transfer channels, despite the impending U.S. tax on remittances.
Foreign direct and portfolio investment inflows are likewise projected to soften from 2024, reflecting heightened global financial volatility and cautious investor behavior.
However, recent policy reforms -- including amendments to the Investors' Lease Act -- are poised to improve the investment climate.
The BSP expects the gross international reserves to remain adequate, providing a robust buffer against external liquidity needs even as global market conditions evolve.
The BSP vowed to continue engaging proactively with external stakeholders and upholding macroeconomic stability, while closely monitoring emerging risks that impact the external sector. ■
