The Philippines is expected to post a current account deficit of nearly $20 billion annually through 2027, as elevated oil and commodity prices continue to drive up import costs, according to updated projections from the Bangko Sentral ng Pilipinas (BSP).
The central bank forecasts the current account deficit at $19.1 billion in 2026, equivalent to 3.8% of gross domestic product (GDP). For 2027, it expects the deficit to widen slightly to $19.4 billion, or 3.6% of GDP.
The current account measures the flow of goods, services, and income between the Philippines and the rest of the world. A deficit means the country’s payments abroad exceed its receipts from these transactions.
Elevated global oil and commodity prices are expected to remain the main pressure on the country’s external accounts. Sluggish global growth, geopolitical tensions, and high transport costs are also weighing on the outlook.
Electronics exports, service receipts, and remittances from overseas Filipinos are expected to provide support, but these inflows may not be enough to offset the country’s import bill.
Overall Balance of Payments Also in Deficit
The BSP expects the country’s overall balance of payments (BOP) to remain in deficit at $9.2 billion, or 1.8% of GDP, in 2026. For 2027, it projects the shortfall to narrow to $8.5 billion, equivalent to 1.6% of GDP.
Net financial inflows are projected at $11.4 billion this year and $11.8 billion in 2027. These are expected to be driven largely by foreign borrowing by the national government, banks, and corporations. Direct investment is also expected to remain positive, although inflows are projected to be modest.
The country retains a financial buffer against external pressures. The BSP expects gross international reserves to remain above $100 billion in both 2026 and 2027.
Import Costs Continue to Pressure the Economy
The pressure on the country’s external accounts was already evident in the first half of 2026. The current account deficit reached $8.97 billion in the first six months, up from $6.47 billion in the same period last year, based on BSP data.
Higher import costs, including those for fuel and other commodities, have contributed to the widening gap as import growth outpaces gains in export earnings.
The BSP expects import growth to slow in the second half of 2026 as households and businesses adjust to elevated inflation and weaker domestic activity.
For Filipino consumers, persistently high fuel prices can feed into transportation, electricity, food, and other household expenses. A sustained current account deficit can also add pressure to the peso, although exchange rates depend on several factors, including capital flows, interest rates, and global market conditions.
The latest projections underscore the challenge of managing higher import costs while maintaining sufficient foreign exchange inflows to support the Philippine economy.
