NEW balance of payments (BoP) projections have been approved by the Bangko Sentral ng Pilipinas, with higher surpluses expected for this year and the next given positive outlooks for economic growth, inflation, and world trade.
“The latest set of forecasts indicate an improvement in the overall balance of payments position for 2024 and 2025 relative to the June 2024 projection exercise,” the Bangko Sentral ng Pilipinas (BSP) said late Friday.
“This development is underpinned mainly by the sustained positive global and domestic economic growth prospects, decelerating inflation, as well as the pickup in world trade activity,” it added.
The BoP is a summary of a country’s transactions with the rest of the world for a specific period. It consists of the current account, which covers trade in goods, services, and primary and secondary income (which includes overseas Filipino worker remittances); the capital account — capital transfers and nonfinancial assets — and the financial account, which consists of investments from abroad.
The 2024 BoP surplus projection was raised to $2.3 billion from $1.6 billion, while that for 2025 edged up to $1.7 billion from $1.5 billion.
The country recorded a BoP surplus of $3.7 billion last year. As of the second quarter of this year, the BoP was in surplus at $1.4 billion.
The central bank said the surplus was likely to be higher than previously estimated given a significant first-half rise in non-resident inflows, which tempered the impact of a wider current account deficit.
Net foreign direct investments (FDI) are now expected to hit $10 billion this year from $9.5 billion previously, while net foreign portfolio investments (FPI) are also seen improving to $4.2 billion from $3.1 billion.
The net FDI outlook for 2025 was kept at $10.5 billion, while that for FPI was raised to $2.9 billion from $2.2 billion.
The financial account will likely end the year with a net inflow of $10.5 billion, the BSP said, up from the $7.7 billion projected three months earlier, while the outlook for 2025 was also raised to $8.7 billion from $5.0 billion.
As for the current account, the estimate for this year is a deficit of $6.8 billion — up from $4.7 billion previously. A higher $5.5-billion shortfall — this was $2.0 billion three months ago — was set for 2025.
Merchandise exports were projected to hit $57.6 billion this year, down from $58.1 billion previously, with growth slowing to 4.0 percent from 5.0 percent. The 2025 estimates were also trimmed to $61.1 billion from $61.6 billion, with growth staying at 6.0 percent.
The outlook for services exports, meanwhile, was cut to $54.6 billion from $55.1 billion for this year and $6.0 billion from $60.5 billion for 2025, with growth slowing to 13.0 percent from 14.0 percent for 2024 and staying 10.0 percent next year.
Good imports are expected to edge up to $123.7 billion and $129.9 billion this year and the next, respectively, from $123.5 billion and $129.7 billion. Growth rates were seen staying unchanged at 2.0 percent and 5.0 percent.
Services imports are estimated to pick up to $33.5 billion from $33.0 billion this year and $35.5 billion from $35.0 billion in 2025. Growth is expected to stay at 13.0 percent and 6.0 percent.
The forecasts for travel receipts and cash remittances were retained at $12.8 billion (40-percent growth) and $35.5 billion (3.0 percent) for this year. Those for 2025, respectively, were also kept at $14.0 billion (10-percent growth) and $35.5 billion (3.0 percent).
Outsourcing revenues were forecast to hit a lower $31.4 billion for 2024 and $33.6 billion next year from $31.7 billion and $34.0 billion. Growth this year will be a slower 6.0 percent, instead of 7.0 percent, and stay at 7.0 percent next year.
Gross international reserves (GIR), lastly, were forecast to close out the year at $106 billion instead of $104 billion and also improve to $107 billion instead of just hitting $105 billion in 2025.
The revised BoP forecasts, the BSP said, come with limitations given a continued buildup in external challenges.
“The BSP will continue to monitor closely emerging external sector developments and risks and how these may impact the BSP’s fulfillment of its price and financial stability objectives,” the central bank added.
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