The Bangko Sentral ng Pilipinas (BSP) has revised its forecast for the balance of payments (BOP) deficit in 2023, projecting a lower deficit of $1.2 billion compared to the $1.6 billion announced in March.
The revision is attributed to a narrower trade gap and growth in remittances, travel, and business process outsourcing (BPO) receipts.
Looking ahead to 2024, the BSP expects the BOP to remain in a deficit position of $500 million. This outlook is based on the anticipation of continued recovery in goods exports and imports, as well as sustained expansion in travel receipts and BPO revenues.
The BOP provides a comprehensive overview of a nation’s economic dealings with other countries during a specified timeframe while a deficit arises when a country’s imports surpass its exports.
In the context of the Philippines, the continued existence of a BOP deficit can be attributed to heightened demand stemming from a growing economy.
The newly projected BOP deficit for 2023 is equivalent to 0.3 percent of the country’s gross domestic product (GDP), while for 2024, it is estimated to be 0.1 percent of GDP.