The country's balance of payments (BOP) surplus is expected to post a bigger surplus for both 2024 and 2025, according to the Bangko Sentral ng Pilipinas (BSP) on Friday.
The BOP summarizes a country's economic transactions with the rest of the world for a specific period. The overall position can be in surplus, deficit or balance.
In a statement, the BSP said the BOP is expected to register a surplus of $3.5 billion in 2024, higher than the $2.3 billion earlier forecast. For 2025, the BSP also revised upward the BOP surplus to $2.1 billion from $1.7 billion.
"The latest set of forecasts points to continued resilience of the country’s overall BOP position for 2024 and 2025, while showing a decelerating path relative to the 2023 outturn," the central bank said.
"This assessment is underpinned mainly by stable yet moderating global and domestic economic growth prospects; a slowing inflation trajectory across jurisdictions; lingering geopolitical and weather shocks; as well as possible shifts in US trade and investment policies under the incoming Trump administration," it added.
The BSP expects the current account shortfall to widen to $10.4 billion in 2024 from the earlier projection of $6.8 billion.
"This is largely a result of the lower growth forecasts for both goods and services exports in 2024 alongside higher projected services imports," the BSP said.
Goods exports growth was lowered to 2 percent from the earlier 4 percent while the forecast for services exports was also slashed to 8 percent from 13 percent.
The growth projection for services imports however was revised upward to 19 percent from 13 percent.
"The latest growth forecast for services exports is anchored on the expected deceleration of revenue inflows coming from business process outsourcing (BPO) and travel activities, consistent with latest trend driven in part by domestic constraints in AI (artificial intelligence) adoption and slow return of Chinese tourists into the country, among others," the BSP said.
The BSP said merchandise exports will likely deliver a more subdued performance in 2024 due to decline in exports of semiconductor products, copper metal, and bananas.
"Expectations of softer global demand amid tight monetary conditions, post-pandemic fiscal consolidation, as well as larger trade barriers and increased uncertainty from President-elect Trump’s announced policies also continue to weigh down the near-term prospects for goods exports," it said.
Travel receipts will likely grow by 15 percent in 2024, while BPO revenues growth is projected to expand by 5 percent.
The projected cash remittances growth was retained at 3 percent.
The BSP also projects a higher net inflow of hot money to $6.3 billion from $4.2 billion, while the foreign direct investment (FDI) net inflow projection was revised downward to $9.0 billion from $10 billion.
For 2025, the BSP said the overall BOP is anticipated to remain in a surplus despite the projected widening of the current account to $2.4 billion.
"Sustained net inflows from the financial account will continue to buoy the overall BOP outlook this year. There is still scope for global trade to pick up in 2025 given an environment of moderating global inflation and improved business activity," the BSP said.
PNA PHOTO
