Key points:
The overall position of the BOP — the net value of dollar flows into or out of the local economy due to its transactions with the rest of the world — is expected to post a surplus of $2.1 billion, or 0.4 percent of GDP, below the 2024 projection of $3.5 billion.
In a statement on Friday, Jan. 3, 2025, the BSP said sustained inflows in the financial account are seen as key drivers of the surplus, compensating for a widening current account deficit projected at $12.1 billion, or 2.4 percent of GDP.
The forecast reflects global inflation moderation and improved business activity but warns of risks from geopolitical tensions, trade uncertainties, and climate-related challenges.
The deficit in the current account (which includes the tally of goods, services, income, and current transfers) is expected to widen due to increased goods imports, offsetting modest growth in exports.
The financial account (which measures investments and liabilities to and from foreign entities) is anticipated to benefit from stable foreign direct investments and rising portfolio inflows.
Meanwhile, the Philippines’ reserves are forecast to reach $110 billion, providing a buffer against external shocks.
While the outlook remains positive, the BSP emphasized the need for vigilance amid emerging global and domestic risks, including policy shifts in the United States and uncertainties in China’s economic recovery.
The BSP reaffirmed its commitment to monitoring external developments to ensure financial stability and economic resilience.
