Philippines BOP deficit to widen as oil, trade risks mount

Merchandise exports are still seen at $65.3 billion this year and $67.9 billion next year. Goods import forecasts were cut to $135.3 billion and $142 billion, respectively, from $137.9 billion and $144.8 billion.

Services exports projections were trimmed to $53.0 billion from $53.6 billion for 2026, with imports cut to $39.8 billion from $40.2 billion. Travel receipts were held at $8.8 billion for 2026 and $9.0 billion for 2027. The outsourcing revenue outlook was cut to $34.3 billion from $34.8 billion for this year, and to $35.3 billion from $36.2 billion for next year.

Remittance forecasts were slightly lowered to $36.6 billion for 2026 and $37.7 billion for 2027, from $36.7 billion and $37.7 billion.

The financial account is expected to see inflows of $9.8 billion this year, down from $12.9 billion, and $10.6 billion next year, versus $13.8 billion. Net foreign direct investment forecasts were cut to $7.0 billion from $7.5 billion for 2026, with 2027 unchanged at $8.0 billion. Net foreign portfolio investment projections were slashed to $1.8 billion from $3.7 billion for this year, and to $3.3 billion from $4.1 billion for 2027.

Gross international reserves are now seen ending 2026 at $104 billion, down from $111 billion, and at $105 billion for 2027, versus $112 billion.

"Risks remain tilted to the downside, reflecting the possibility of a prolonged or broader Middle East conflict, deeper geopolitical fragmentation, renewed trade tensions, and weaker-than-expected productivity gains from new technologies," the BSP said. "Against this backdrop, global trade and capital flows are expected to remain subdued and volatile."