The bank said upside risks stem from higher liquefied petroleum gas and gasoline prices. These pressures are likely to be partly offset by lower electricity rates in Meralco-serviced areas and declining kerosene and diesel prices, BSP said in a press release.
The BSP will continue to monitor domestic and international developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy.
On the external front, the BSP projects the overall balance of payments (BOP) to swing from a modest surplus of $0.6 billion, or 0.1 per cent of gross domestic product (GDP), in 2024 to deficits in 2025 and 2026.
The BOP deficit is estimated at $5.3 billion, or 1.5 per cent of GDP, in January-September 2025, with full-year deficits forecast at $6.9 billion (1.4 per cent of GDP) in Q3 2025 and $6.2 billion (1.3 per cent) in the fourth quarter (Q4).
In 2026, the deficit is expected to narrow to $3.4 billion (0.6 per cent) in Q3 before widening again to $5.9 billion (1.2 per cent) in Q4.
The current account deficit stood at $18.3 billion, or 4 per cent of GDP, in 2024 and is projected at $15.5 billion, or 3.2 per cent of GDP, in Q4 2025, easing slightly to around $15.3 billion, or 3 per cent, by Q4 2026.
Goods trade is expected to remain subdued amid weaker global demand, easing commodity prices and slower domestic growth momentum. Merchandise exports benefited from frontloading ahead of anticipated US tariffs in the first half of 2025, lifting exports by 13 per cent to $47.8 billion in January-September 2025.
Full-year goods exports are forecast at $60 billion in Q4 2025, up 9 per cent year on year (YoY), before moderating to $61.2 billion with 2.0 per cent growth by Q4 2026. However, structural challenges such as logistical bottlenecks, skills mismatches and high input costs continue to weigh on export competitiveness.
Goods imports rose 5.8 per cent to $97.8 billion in the first nine months of 2025 and are projected to reach $127.6 billion in Q4 2025, up 3 per cent, increasing further to $130.2 billion by Q4 2026.
Based on early warning systems for currency crisis and debt sustainability, the Philippines remains resilient to external shocks as of the Q4 2025, supported by manageable external financing needs and ample reserve levels, added the release.
ALCHEMPro News Desk (SG)
Receive daily prices and market insights straight to your inbox. Subscribe to AlchemPro Weekly!
marketing@alchempro.com
