BSP forecasts lower BOP deficits in 2023 and 2024


Posted at Mar 17 2023 07:11 PM

MANILA — The Bangko Sentral ng Pilipinas said the country will likely post a smaller balance of payments deficit this year next year compared to 2022.

The BSP said the Philippines’ BOP deficit may narrow to $1.6 billion this year, much lower than its earlier projection of a $5.4 billion shortfall, and also much lower than the $7.3 billion actual BOP deficit in 2022. 

This is as subdued global economic activity this year threatens to hurt foreign trade and investments, while inflation dampens local demand, the BSP said.

“Persistent high inflation, the protracted Ukraine-Russia conflict, and pandemic-related legacies remain the key risks to the country’s external sector outlook, albeit with lesser adverse impact relative to previous estimates,” the BSP said citing the IMF’s World Economic Outlook.

“On the domestic front, persistent high inflation and the expected easing of pent-up demand, as the impact of policy rate increases on the economy takes effect, are seen to dampen the growth forecast for this year.”

For 2024, the BOP deficit is forecast to further shrink to around $500 million.

Meanwhile, the country’s gross international reserves are also projected to rise to $100 billion this year from $96.1 billion last year. 

The GIR is also seen to further rise to $102 billion in 2024.