Philippines' current account deficit to narrow in 2025, 2026, central bank says

New Straits Times

5 days ago

MANILA: The Philippine central bank is forecasting the country's current account deficit to narrow to 3.30 per cent of gross domestic product (GDP) this year and to 2.50 per cent next year, compared to a previous estimate of 3.90 per cent for both years, it said in a statement on Monday.
The balance of payments is projected to be at a deficit of 1.30 per cent of GDP this year, and 0.50 per cent next year, compared with the previous forecast of 0.80 per cent for both years, it said.
The revisions reflect global uncertainties that could potentially dampen investor confidence, the central bank said, but the country still has enough liquidity to cushion the economy against external headwinds, it added.
Gross international reserves are expected to dip slightly to US$104 billion this year, down from US$106.30 billion in 2024, before rebounding to US$105 billion next year, the central bank said.
The bank's forecasts for remittances from Filipinos living and working abroad remain unchanged, and are projected to grow 2.80 per cent this year to US$35.50 billion, and by a further three per cent in 2026 to US$36.50 billion.
Last week, the government lowered its growth target for this year and for 2026 to 2028, citing the economic impact of tensions in the Middle East as well as shifts in US trade policies.
Growth for 2025 is now projected at 5.50–6.50 per cent, down from the government's earlier forecast of 6–8 per cent. Targets for 2026 to 2028 now stand at 6–7 per cent, down from the previous range of 6–8 per cent.