Central bank revises BoP forecasts for 2025, 2026

THE BANGKO SENTRAL ng Pilipinas (BSP) revised its balance of payments (BoP) forecasts for this year and 2026 amid heightened global uncertainty.

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In a statement, the BSP said the overall BoP position is projected to end 2025 at a $6.3-billion deficit or -1.3% of gross domestic product (GDP), wider than the previous forecast of a $4-billion deficit or -0.8% of GDP.

For 2026, the central bank expects the BoP deficit to shrink to $2.8 billion or -0.5% of GDP from the previous projection of $4.3 billion or -0.8% of GDP.

"This outlook reflects a continued current account shortfall and moderating financial flows. While the domestic economy benefits from steady growth, low inflation, and ongoing structural reforms, these are offset by global trade uncertainty, heightened geopolitical risks, and weakened investor confidence," the BSP said.

Latest BSP data showed the country’s BoP stood at a $5.8-billion deficit in the January-to-May period, a reversal from a $1.6-billion surplus in January to May 2024.

Meanwhile, the BSP also adjusted the forecasts for the country’s current account for this year and 2026.

This year’s current account deficit is now expected to narrow to $16.3 billion or -3.3% of GDP, a downgrade from the previous projection of a $19.8-billion deficit or -3.9% of GDP.

For 2026, the current account deficit is projected to further shrink to $13.6 billion or -2.5% of GDP, smaller than the previously projected $21.2 billion or -3.9% of GDP.

"The current account is expected to remain in deficit at around 3% of GDP, indicating a gap in savings over investment amid global uncertainties. As a result, external financing remains necessary to support the country’s infrastructure-led, investment-driven growth strategy," the BSP said.