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July 19, 2024

BSP projects $1.6 billion BOP surplus for 2024 amid easing inflation, rising exports

The Philippines’ balance of payments (BOP) is projected to stay in surplus this year and next as global economic activity rebounds, boosting the country’s exports and investments amid lower inflation, central bank officials said.

The Bangko Sentral ng Pilipinas (BSP) has raised its BOP surplus forecast for 2024 to $1.6 billion from its previous estimate of $700 million.

For 2025, the BSP expects a surplus of $1.5 billion, reversing its earlier forecast of a $500 million deficit.

BSP Director Sittie Hannisha M. Butocan of the Department of Economic Research said in a press briefing on Friday that the revisions were driven by faster global growth, easing inflation, and recovering demand for electronics. However, she also noted risks from moderate growth in China, geopolitical tensions, and weather-related disruptions.

Domestically, the BSP anticipates steady economic growth, lower inflation, and sustained public infrastructure investment, though it flagged concerns over weaker-than-expected first-quarter GDP growth, high interest rates, and adverse weather.

The recently ratified Regional Comprehensive Economic Partnership (RCEP) Agreement is expected to further boost the trade sector by enhancing market access, reducing trade barriers, and improving export competitiveness.

The BSP projects robust growth in travel receipts and business process outsourcing (BPO) revenues, with BPO revenues expected to increase by 7% and travel receipts by 40% in 2024.

Remittance inflows from overseas Filipinos are anticipated to grow by 3% annually, further supporting the current account.