The Philippine balance of payments (BOP) will remain under pressure through 2027 as heightened geopolitical tensions and structural constraints drive a widening current account deficit, the Bangko Sentral ng Pilipinas (BSP) said.
It projected the current account deficit will reach around 4.0 percent of gross domestic product over 2026–2027. The overall balance of payments is expected to stay in a deficit of about 1.5 percent to 1.6 percent of GDP during the same period.
The BSP said that while the adjustment should remain orderly, the economy faces a “challenging global environment” where growth remains below pre-pandemic trends and world trade momentum is weakening.
Higher energy prices stemming from conflict in the Middle East and “episodic risk-off sentiment” are expected to shape the outlook through cost and confidence channels rather than abrupt volume contractions, the BSP said.
Goods exports are forecasted to grow by 3.0 percent in 2026 and 4.0 percent in 2027, representing a slowdown from the 15-percent expansion recorded in 2025.
The BSP attributed the moderation to inventory normalization and higher trade costs, but it noted that electronics exports will continue to find support from demand for artificial intelligence peripherals and electric vehicle inputs.
Higher oil prices are expected to be a dominant factor, with goods imports projected to grow by 5.0 to 6.0 percent. While private investment will support capital goods imports, softer public infrastructure spending is expected to moderate overall growth in the near term.
Non-trade inflows such as remittances and services will provide a partial offset to trade pressures. Cash remittances are projected to grow by 3.0 percent over the next two years, remaining a “key source of external stability” despite global tensions.
The IT-BPM sector is expected to grow by about 4.0 percent through 2027, but the BSP warned that growth is currently constrained by skills shortages and an uneven transition toward AI exposure.
“The sector will nevertheless benefit from growth in some segments,” the BSP said, noting that agri-food exports will also benefit from sustained demand for coconut products.
To help manage these pressures, the BSP expects net foreign direct investment to reach between $7.5 billion and $8.0 billion.
The BSP said the country’s gross international reserves remain sufficient to provide a cushion against external shocks.
The BSP these baseline projections reflect “rapidly evolving external developments” and will be reassessed as new information regarding global conflicts and trade policies becomes available.
