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BSP revises its balance of payments projections for 2015

05.22.2015

The BSP releases its reassessment for the 2015 balance of payments (BOP). This incorporates the BOP outturn in 2014 and latest available data to-date. The reassessment exercise also reflects recent and prospective economic developments, both domestic and global, that could have a bearing on the outlook for the country’s external payments position.

The 2015 BOP position is expected to be in a surplus of US$2.0 billion, a reversal from the shortfall recorded in 2014 of US$2.9 billion. This is due primarily to a sustained strong current account surplus following the downward revision in international oil prices. As a result, year-end gross international reserves (GIR) are expected to be around $81.6 billion, an improvement from the $79.5 billion posted in 2014. At this level, the GIR remains ample, covering 10 months’ worth of imports of goods and payments of services and income.

The current account, which has been in surplus since 2003, is projected to post a surplus of $14.2 billion, equivalent to 4.4 percent of GDP.  The current account is expected to be supported by strong overseas Filipino remittances and robust receipts from business process outsourcing (BPO) and tourism.  A narrowing merchandise trade deficit is also expected to prop up the current account. Goods exports are projected to rise by 5.0 percent, supported by the improvement in the outlook for electronics. Meanwhile, goods imports are expected to expand by 1.0 percent, bolstered by a robust outlook in domestic activity, even as the downward adjustment in the oil price assumption resulted in lower import bill.

The balance of the financial account is expected to post a lower outflow of $8.4 billion from $10.1 billion recorded in 2014. While the global financial environment is expected to remain volatile, the continued bullish business confidence is expected to support higher foreign direct investments and modest inflows in portfolio investment, a reversal from an outflow of $1.3 billion in 2014 to a modest inflow of $0.2 billion in 2015

Overall, the external position of the Philippines is seen to improve in 2015. This should support the continued strong investor confidence in the economy.  Moreover, the country’s external position remains a key source of resilience and policy flexibility that would enable the economy to ride out the volatilities of global economic and financial developments.

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