The Bangko Sentral ng Pilipinas (BSP) said Friday it raised the projected 2024 balance of payments (BOP) surplus to $3.5 billion from an earlier estimate of $2.3 billion.
The BSP’s policy-setting Monetary Board released its 2024-2025 BOP outlook showing a slightly lower figure than the actual 2023 surplus of $3.7 billion in 2023.
The BOP is also expected to enjoy a surplus of $2.1 billion in 2025, despite the widening of the current account deficit from $10.4 billion to $12.1 billion.
“This outcome is largely due to the upward revision in forecasts for portfolio investments and other investments, which compensated for the reduction in the projected FDI level for the year,” the BSP said.
“The higher projected financial account compensated for the widening of the current account deficit during the said year,” it said.
“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.
“Nevertheless, US-related uncertainty, specifically linked to possible policy shifts in the US trade, investment, and migration policies, will remain a key downside risk to the 2025 external sector outlook,” it said.
The BSP said given the prospects of continued foreign exchange inflows into the economy, a further buildup is expected in the gross international reserves for 2024-2025. GIR was projected at $109 billion in 2024 and $110 billion in 2025.
The BSP said 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.
“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,” the BSP said.
“Global economic growth is expected to moderate in 2024 relative to the previous year and to remain steady in 2025, with growth impetus coming significantly from advanced economies,” it said.
BSP added that inflation is also seen to further decelerate worldwide, triggering possible move towards less restrictive monetary policy by central banks.
“However, heightened uncertainty emanating from lingering geopolitical and trade tensions, limited fiscal space, financial market volatilities, as well as climate-related threats continue to pose risks to the global growth outlook,” BSP said.
“Meanwhile, the Philippine economy is seen to achieve the lower end of the near-term economic growth targets set by the national government. Economic activity will be supported by strengthening domestic demand boosted by easing inflation, lower oil prices, and timely enactment of the national budget. Continued government efforts to improve infrastructure and the overall business environment are expected to support the outlook for domestic economic growth as well as the external sector,” it added.
