Weak trade-in-goods is attributed to the forecast deficit in the Philippines’ balance of payments (BoP) position until 2026, the Bangko Sentral ng Pilipinas (BSP) said Friday.

Data released by the central bank showed that as of end-September this year, the country’s overall BoP position, which is the sum of its total trade with the rest of the world, stood at a deficit of $5.3 billion, or about -1.5 percent of domestic output.

The actual figure is lower than the projection of the BSP’s policy-making Monetary Board (MB) of a $6.9 billion deficit.

For the whole of this year, the projected deficit is seen to reach USD6.2 billion, while it is a deficit of around $5.9 billion for 2026.

The deficit in the country’s BOP position is a reversal of the situation in the past, which the BSP, in a statement, traces to “continued current account shortfall arising from a sustained trade-in-goods gap and weaker services receipts.”

It also said that “foreign direct investments and external loans have also moderated amid lingering global policy uncertainty.”

Softness in trade seen persisting

“Goods trade is expected to remain soft, shaped by weaker global demand, easing commodity prices, and slower domestic growth momentum. Frontloading in anticipation of the US tariffs in the first half of the year has helped provide a temporary boost to merchandise exports in 2025,” it said, but noted that “structural constraints — including logistical bottlenecks, skills mismatches, and high input costs — also continue to weigh on export competitiveness.”

BSP said growth of services exports is seen to post slower growth due to higher costs for the business process outsourcing (BPO) and the tourism sectors.

“Meanwhile, overseas Filipino (OF) remittances are expected to remain resilient, supported by strong global labor demand and the sustained use of formal transfer channels, with the impending US tax on remittances expected to pose minimal impact,” it noted.

Slower growth is also expected for foreign direct investments (FDIs) “reflecting cautious market sentiment and heightened global financial volatility.”

In the medium term, FDIs are expected to be bolstered by the passage of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act, the Capital Markets Efficiency Promotion Act (CMEPA), the Investors’ Lease Act, Enhanced Fiscal Regime for Large-Scale Metallic Mining Act and new initiatives on digital connectivity such as the Konektadong Pinoy Act.