BSP sees BOP deficits in 2026 and 2027
The Philippines’ balance of payments (BOP) deficit is projected to reach $9.2 billion this year and $8.5 billion in 2027 as elevated oil prices, transport costs and geopolitical tensions weigh on the country’s external position, the Bangko Sentral ng Pilipinas (BSP) said.
The projected deficit for 2026 is equivalent to 1.8 percent of gross domestic product (GDP), narrowing to 1.6 percent next year, according to the BSP’s latest BOP forecast released Tuesday.
“These deficits highlight the shock from elevated oil and commodity prices, which continue to weigh on the country’s external position,” the central bank said.
The current account deficit, meanwhile, is expected to reach $19.1 billion, or 3.8 percent of GDP, this year and remain broadly stable at $19.4 billion, or 3.6 percent of GDP, in 2027.
“Elevated fuel and commodity prices remain the principal driver,” the BSP said, adding that import growth is expected to slow in the second half of 2026 as businesses and households adjust to weaker domestic activity and high inflation.
Goods exports, particularly electronics, are expected to provide some support, although their momentum could moderate amid uneven global demand.
Service inflows and remittances will also help cushion the country’s external position, but the BSP cautioned that they would not fully offset the trade-driven deficit.
The central bank expects net financial inflows to reach $11.4 billion in 2026 and $11.8 billion in 2027, partially financing the current account shortfall.
Foreign borrowing by the national government, corporations and banks is expected to drive other investment inflows. Direct investment is projected to remain positive but modest, while portfolio investments will remain sensitive to global financial conditions.
The BSP’s latest projections also point to slower goods import growth next year. Goods imports are forecast to rise 3 percent in 2027, down from a projected 7 percent increase in 2026. Goods export growth is expected to reach 4 percent in both years.
Cash remittances are projected to rise 2.7 percent to $36.6 billion in 2026 and another 3 percent to $37.7 billion in 2027.
Gross international reserves are expected to remain above $100 billion over the next two years, providing a buffer against external shocks. The BSP projects reserves at $104 billion in 2026 and $105 billion in 2027.
“Alongside services exports and remittances, these reserves will continue to support the economy’s adjustment to external pressures,” the central bank said.
The BSP noted that its projections remain subject to considerable uncertainty because of limitations in data compilation and data quality, warning that actual results could differ materially from its forecasts.