MANILA – The Philippine central bank said on Friday it expects the current account deficit to be smaller than previously forecast in 2024 and 2025, due to a narrowing trade gap and sustained dollar flows from overseas Filipinos and the outsourcing sector.

The current account deficit for 2024 is now forecast at $4.7 billion, equal to 1.0% of gross domestic product (GDP), from the previous projection of a $6.1 billion gap, or 1.3% of GDP, the Bangko Sentral ng Pilipinas (BSP) said.

For 2025, the current account deficit is seen at $2 billion, or 0.4% of GDP, compared with an earlier estimate of a $5.8 billion deficit, equivalent to 1.1% of GDP.

The central bank expects a balance of payments (BOP) surplus of $1.6 billion, or 0.3% of GDP for 2024, larger than its previous forecast of a $700 million surplus, or 0.1% of GDP.

For 2025, the BOP is now seen posting a surplus of $1.5 billion, or 0.3% of GDP, a marked turnaround from a previous forecast of a deficit of $0.5 billion, or 0.1% of GDP.

The BSP said a pick-up in global economic activity, easing domestic inflation and forecast growth of 3% in remittances from overseas Filipino remittances were factors in revised forecasts.

Remittances from millions of Filipinos living and working abroad will help the Southeast Asian nation record end-2024 gross international reserves of $104 billion in 2024 and $105 billion in 2025, the central bank said. — Reuters