Philippines Expects Weaker Dollar Position in 2025

The Philippines is expecting a weaker external position this year due to a large import bill and global uncertainties driving dollar outflows. The Bangko Sentral ng Pilipinas (BSP) projects a balance of payments deficit of $6.3 billion for 2025, worse than the previous forecast of $4 billion. This marks a reversal from the $600-million surplus in 2024. The deficit means more funds exited the country than entered, reducing resources for transactions with other economies. The BSP sees a smaller dollar shortfall of $2.8 billion in 2026, with deficits expected to continue in both years.

Despite steady growth and structural reforms, global trade uncertainty, geopolitical risks, and weakened investor confidence offset the domestic economy's benefits. Goods exports may contract by 1 percent, while merchandise imports are expected to grow by the same magnitude. Travel receipts are projected to grow by 10 percent, BPO revenues by 5 percent, and cash remittances by 2.8 percent. Foreign direct investments are forecasted at $7.5 billion, lower than the previous estimate, while short-term foreign funds in stock and bond markets are expected to have a net inflow of $6.8 billion by year-end.

According to the source: Inquirer.net.