PH dollar deficit seen narrowing as exports gain
The Philippines is expected to post narrower dollar deficits this year and in 2027 than previously forecast, as stronger exports fueled by the global artificial intelligence boom bolster foreign exchange inflows, the Bangko Sentral ng Pilipinas (BSP) said.
The central bank projected a balance of payments (BoP) deficit of $9.2 billion by year-end, equivalent to 1.8 percent of gross domestic product (GDP). That was down from its previous forecast of $10.7 billion, or 2.1 percent of GDP.
BoP measures the flow of money into and out of the economy through transactions with the rest of the world.
A deficit means outflows are expected to exceed inflows.
Merchandise exports are expected to grow 6 percent to $67.2 billion this year, double the growth rate in the BSP’s previous forecast of 3 percent.
The central bank cautioned, however, that the momentum could ease “as global demand remains uneven.” Although Philippine electronics exports have posted gains in recent months, the World Bank earlier singled out the country as an outlier in East Asia, saying it has yet to reap significant gains from the artificial intelligence (AI) boom.
“Goods exports, led by electronics, provide resilience,” the BSP said.
The central bank also sharply raised its forecast for travel receipts, which it expects to grow 5 percent this year, up from its previous estimate of 1 percent. Despite concerns about disruption from AI, the BSP increased its revenue growth forecast for business process outsourcing to 3 percent from 2.5 percent.
Imports
Imports, meanwhile, are expected to grow 7 percent to $139.7 billion this year, faster than the previously projected 4-percent increase, putting pressure on the country’s external accounts.
“Elevated fuel and commodity prices remain the principal driver, but imports growth is expected to compress in the second half of 2026, as firms and households adjust to slower domestic activity and high inflation,” the BSP said.
For 2027, the BSP expects the BoP deficit to narrow further to $8.5 billion, or 1.6 percent of GDP.
Gross international reserves are projected to remain above $100 billion in both 2026 and 2027, providing the country with a buffer against external shocks.
