The country posted a lower surplus from international transactions for the balance of payments (BoP) in the first quarter to post $238 million from $3.5 billion in the same period in 2023 due to lower foreign investments in financial instruments.

Breaking down the BoP surplus, the Bangko Sentral ng Pilipinas (BSP) on Friday said foreign debts declined by 17.1 percent to $4.9 billion from $5.9 billion.

On the other hand, the current account improved as the deficit dropped by 60.6 percent to $1.7 billion from $4.4 billion, following lower costs of goods imports and higher exports.

Thus, the deficit in goods imports declined to $14.7 billion from $17.2 billion.

On the other hand, income from services exports was lower to $3.9 billion from $4.7 billion.

Meanwhile, surplus in capital account, which refers to non-financial assets, increased to $16 million from $15 million.

Better figures seen

Moving forward, BSP sees a higher surplus for this year due to still cheaper import prices and bigger export markets, while the surplus might slightly decline in 2025.

Based on its meeting on Thursday, BSP said it estimated a relatively higher surplus in overall BoP for this year at $1.6 billion from $0.7 billion it estimated in March.

“The lower current account shortfall is anchored on the narrowing of the merchandise trade gap as growth in goods imports is estimated to moderate due, in turn, to easing in import prices while the goods exports are expected to remain on a steady recovery pace,” BSP said.

Semiconductors and electronics exports will remain major growth drivers, it added.

BSP said the Regional Comprehensive Economic Partnership (RCEP) will continue to facilitate easier and cheaper exchange of goods and services.

Effective 2 June 2023, RCEP allows low to zero tariffs on select goods within 20 years among the 10 members of the Association of Southeast Asian Nations, New Zealand, Australia, South Korea, China and Japan.