Manila: The Philippines' balance of payments (BOP) is projected to remain under pressure through 2027, as global uncertainties and domestic constraints impact the external position, according to Bangko Sentral ng Pilipinas (BSP).
According to Philippines News Agency, the BSP's report, released Tuesday night, highlights that current global economic and geopolitical developments shape the overall BOP outlook primarily through cost and confidence channels rather than abrupt volume contractions. The country's BOP deficit was recorded at USD5.7 billion, or about 1.2 percent of GDP, as of the end of 2025. The BSP anticipates the deficit to widen to USD7.8 billion this year and USD8.5 billion in 2027.
The report further elaborates that the trade, services, and income dynamics are expected to result in a widening external imbalance. The current account deficit is projected to expand to around 4.0 percent of GDP over 2026-2027, while the BOP is anticipated to remain in deficit at about 1.5-1.6 percent of GDP. Exports are seen growing modestly at 3 percent this year and 4 percent in 2027, a significant slowdown from the 15 percent expansion in 2025.
Notably, the electronics export sector will benefit from demand for AI-related peripherals, electric vehicle inputs, and data center equipment. Agri-food exports will also gain from sustained demand for coconut products. However, the BSP identified persistent challenges, including structural constraints like high electricity costs, regulatory frictions, and logistics bottlenecks limiting supply expansion.
Imports are projected to expand by 5 to 6 percent, driven largely by higher oil prices. Capital goods imports remain supported by private investment activity, although softer public infrastructure spending is expected to moderate overall growth in the near term. Services imports, particularly outbound travel, are projected to continue to expand faster than services exports, adding further pressure to the external balance.
The IT-BPM sector is expected to provide some cushion, with revenues projected to grow by 4 percent this year and next. While some firms are realizing productivity gains from AI adoption, others face transition costs that weigh on near-term growth. Travel receipts are also expected to grow at a moderate pace due to higher airfares, safety concerns, and increased regional competition.
Meanwhile, cash remittances are projected to grow by about 3 percent over the next two years, despite geopolitical tensions, as there are no signs of mass repatriation or widespread deployment bans. The BSP stated that foreign direct investments, estimated at USD7.5 billion to USD8 billion, will provide a stable base, while portfolio flows remain sensitive to global market sentiment.
The projections suggest an orderly but gradual adjustment, with uncertainty and sentiment pressures mainly transmitted through upticks in prices rather than sharp volume contraction. The BSP emphasized that external sustainability hinges on stable financing, resilient non-trade inflows, and adequate foreign exchange buffers. The country's gross international reserves remain sufficient to provide a cushion against external shocks over the forecast horizon.
