MANILA — The overall balance of payments (BOP) of the Philippines is projected to move from a modest surplus in 2024 to deficits in 2025 and 2026, reflecting sustained trade and current account pressures, according to projections from government economic agencies.

The BOP, which summarizes the country’s economic and financial transactions with the rest of the world, is expected to face a continued current account shortfall due to a persistent trade-in-goods gap and weaker services receipts. Foreign direct investments (FDI) and external loans are also expected to moderate amid ongoing global policy uncertainty.

Goods trade is projected to remain soft, influenced by weaker global demand, easing commodity prices, and slower domestic growth momentum. While frontloading of exports in anticipation of US tariffs in early 2025 provided a temporary boost, structural constraints—including logistical bottlenecks, skills mismatches, and high input costs—continue to weigh on export competitiveness.

Services exports are also expected to slow, with higher costs affecting both the business process outsourcing (BPO) sector, in terms of rental fees, utilities, and wages, and tourism, including meals and accommodation. Overseas Filipino (OF) remittances are expected to remain resilient, supported by strong global labor demand and continued use of formal transfer channels, with the planned US tax on remittances expected to have minimal impact.

Foreign direct investments are projected to ease from 2024 levels due to cautious market sentiment and heightened global financial volatility. Modest gains may materialize over the medium term with the passage of laws such as CREATE MORE, the Capital Markets Efficiency Promotion Act (CMEPA), the Investors’ Lease Act, and the Enhanced Fiscal Regime for Large-Scale Metallic Mining Act, as well as initiatives on digital connectivity under the Konektadong Pinoy Act. The government is urged to implement these measures effectively and on time.

Gross international reserves are projected to remain adequate, providing a buffer against external liquidity risks. Early warning system (EWS) data on currency crisis and debt sustainability indicate that the Philippines remains resilient to external shocks as of Q4 2025, supported by manageable external financing needs and ample reserves.

The Bangko Sentral ng Pilipinas (BSP) said it will continue to engage proactively with external stakeholders, promote macroeconomic stability, and closely monitor emerging risks affecting the external sector.