The country’s balance of payments (BOP)—which shows how much foreign currency the country earns and spends with the rest of the world—is expected to move from a small surplus in 2024 to deficits in 2025 and 2026. This means the Philippines is projected to spend more foreign currency than it earns in those years.
This change is mainly due to an ongoing gap in the current account. The country continues to import more goods than it exports, and income from services has weakened. At the same time, foreign direct investments and foreign borrowing have slowed, partly because of continued uncertainty in the global economy.
Goods exports are expected to stay weak because of slower global demand, lower commodity prices, and slower growth at home. Some exporters increased shipments earlier in 2025 to get ahead of expected US tariffs, which provided a short-term boost. However, long-standing problems—such as transport and logistics issues, skills shortages, and high production costs—continue to limit export competitiveness.
Growth in services exports is also expected to slow. Costs in the business process outsourcing (BPO) sector—such as rent, utilities, and wages—are higher compared with competitors. Tourism costs, including food and accommodation, have also risen. Meanwhile, overseas Filipino (OF) remittances are expected to remain strong, supported by solid global demand for workers and continued use of formal remittance channels. The planned US tax on remittances is expected to have only a small effect.
Foreign direct investments are expected to decline from 2024 levels as investors remain cautious amid global financial volatility. Over the medium term, investment could improve following the passage of several new laws and reforms, including those related to taxes, capital markets, mining, land leasing, and digital connectivity. This highlights the need for the national government to implement these measures effectively and on time. The country’s foreign exchange reserves are expected to remain sufficient, providing protection against external financial risks.
Based on early warning indicators for currency and debt risks, the Philippines remains resilient to external shocks as of the fourth quarter of 2025. External financing needs are manageable, and reserve levels remain strong.
The Bangko Sentral ng Pilipinas (BSP) committed to continue to work closely with international partners, promote economic stability, and closely monitor risks affecting the country’s external position.
