THE Monetary Board of the Bangko Sentral ng Pilipinas (BSP) recently revised the balance of payments (BOP) projections for 2024 and 2025, noting that surpluses are now expected for both years.
The BOP is a summary of the economic transactions of a country with the rest of the world for a specific period.
In a virtual briefing on Friday, June 14, BSP Department of Economic Research Director Sittie Hannisha Butocan said the central bank expects the BOP to register a surplus of USD1.6 billion this year, up from the earlier forecast of USD700 million.
“This is on the back of a lower current account deficit combined with higher non-resident investment inflows. The lower current account gap is anchored on the narrowing of the merchandise trade deficit as growth in goods imports is estimated to moderate to 2 percent due in part to the continued easing of international commodity prices,” she said.
Butocan said goods export growth has been upgraded to 5 percent from the earlier 3 percent due to the better-than-expected outturn in the first quarter of this year on the back of the robust recovery in global electronics demand.
“Further supporting the current account is the sustained expansion of travel receipts at 40 percent although lower than the previous forecast of 50 percent due largely to base effects,” she said.
Travel exports are also projected to surpass their pre-pandemic level of about USD10 billion to reach USD12 billion to USD13 billion this year.
The BSP also expects foreign direct investments (FDI) and foreign portfolio investments (FPI) to yield higher net inflows of USD9.5 billion and USD3.1 billion, respectively, for 2024.
For 2025, the overall BOP position is projected to reverse into a surplus.
Butocan noted that the BOP is expected to post a surplus of USD1.5 billion, a turnaround from the USD500 million deficit projection earlier.
The narrower current account gap was due to the sustained growth of goods exports at 6 percent combined with a lower growth forecast for imports at 5 percent.
Travel receipts will likely expand by 10 percent in 2025 as tourism activity returns to normal growth path while growth in Business Process Outsourcing (BPO) was estimated at 7 percent as the country continues to be an attractive IT-BPO destination.
Overseas Filipino remittances are projected to grow by 3 percent. (Philippine News Agency)
