Narrower current account deficit seen

The Bangko Sentral ng Pilipinas (BSP) sees the country’s current account deficit as a share of economic output narrowing in 2025 and further easing in 2026, even as next year’s shortfall is slightly wider than earlier expectations, reflecting a persistent trade-in-goods gap and weaker services earnings.

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Based on updated 2025-2026 balance of payments (BOP) forecasts released by the BSP on Friday, Dec. 26, the current account deficit this year is now seen to ease to 3.2 percent of gross domestic product (GDP), marginally narrower than the central bank’s 3.3-percent forecast in the third quarter.

For 2026, the current account deficit—the gap in the country’s net dollar earnings from trade in goods and services and income from overseas Filipino workers (OFWs)—is seen further narrowing to three percent of GDP, although wider than the earlier forecast of 2.9 percent.

As of end-September 2025, the current account deficit stood at 3.6 percent of GDP, narrower than the full-year shortfall equivalent to four percent of domestic output in 2024.

This projected development is expected to translate into the overall BOP, whose deficit is also forecast to ease by year-end and next year to 1.3 percent and 1.2 percent of GDP, respectively, from end-September’s 1.5 percent. These two years’ BOP deficits, however, would reverse last year’s surplus equivalent to 0.1 percent of GDP.