The country’s balance of payments (BOP) is expected to remain under pressure over the next two years due to a weaker global economy and ongoing structural challenges, according to Bangko Sentral ng Pilipinas projections.
Global growth is forecast to stay below pre-pandemic levels, while trade is likely to slow as earlier tariff-driven demand fades. Rising geopolitical tensions, especially in the Middle East, could push energy prices higher and dampen investor confidence. These factors are expected to affect the country mainly through higher costs and cautious market sentiment.
Exports are projected to grow at a slower pace after a strong 15 percent expansion in 2025. Growth is expected at 3 percent in 2026 and 4 percent in 2027, weighed down by weaker global trade and higher costs. However, some sectors may continue to perform well, including electronics—supported by demand for AI-related products and electric vehicle components—and agricultural goods such as coconut products. Supply growth remains limited by high electricity costs and logistical and regulatory issues.
Imports are expected to rise by 5 percent to 6 percent, largely due to higher oil prices. Capital goods imports will continue to be supported by private investments, though slower government infrastructure spending may temper growth. Increased spending on services, particularly overseas travel, is also expected to widen the external gap.
Non-trade inflows will provide some support but face headwinds. Revenues from the IT-BPM sector are projected to grow modestly at around 4 percent, affected by skills shortages and adjustments to AI adoption. Tourism earnings are expected to rise at a moderate pace, constrained by higher travel costs and safety concerns. Remittances from overseas Filipinos remain a key stabilizer, with steady growth of about 3% and no signs of large-scale worker displacement.
Overall, the country’s external position is expected to weaken. The current account deficit may widen to around 4 percent of GDP, while the BOP deficit could reach 1.5 percent to 1.6 percent of GDP.
Foreign investments will help manage the gap but may not fully offset it. Net foreign direct investment is projected at US$7.5 billion to US$8.0 billion, while portfolio flows could remain volatile due to changing global market conditions.
Despite these pressures, the adjustment is expected to be gradual. The country’s foreign exchange reserves are seen as adequate to cushion external shocks. However, authorities note that the outlook remains uncertain and will depend heavily on global developments, particularly geopolitical tensions.
