THE Bangko Sentral ng Pilipinas (BSP) has lowered its projection for the country’s balance of payments (BoP) surplus this year after taking into account the rapid spread of the Covid-19 Delta variant and vaccine supply concerns.

Zeno Ronald Abenoja, managing director of the central bank’s

Department of Economic Research, said at a briefing on Friday that the BoP surplus was now expected to be $4.1 billion this year, or 1.1 percent of the country’s gross domestic product (GDP).

“This is a downward revision from the initial forecast of about 7.1 billion, or 1.8 percent of GDP during the last projection exercise in June of this year,” he noted.

The current account, a major component of the payments balance, is one of the fundamental elements of the revised estimates, according to Abenoja.

This year’s current account surplus is seen to be $3.5 billion, or 0.9 percent of GDP, down from the previous outlook of $10 billion.

“Underlying this revision is the expected widening of the trade in goods deficit as the economy continues to recover,” Abenoja continued.

This is due to an expected 14-percent increase in goods exports from the prior forecast of 10 percent as well as a 20-percent expansion in goods imports from the previous estimate of 12 percent. Both of these, Abenoja added, represent the stronger-than-expected growth in the first half of 2021.

In the meantime, services exports and imports are seen to fall by 2 percent and 4 percent, respectively, in 2021.

“This contraction is driven by the larger than initially forecasted decline of travel receipts. However, the BPO (business process outsourcing) revenues seem to continue to exhibit steady growth of about 5 percent, which will support overall services export,” he explained.

Meanwhile, after plunging by 0.8 percent in 2020, cash remittances from overseas Filipinos are projected to rise by 6 percent in 2021, faster than the previous outlook of 4 percent.

Abenoja added that the financial account is expected to have lower net outflows as a result of reduced resident investments in foreign financial assets, as well as inflows of $7 billion in foreign direct investments and $4.3 billion in foreign portfolio investments, as well as government borrowings, to fund the country’s fight against the pandemic and support the recovery program.

The emerging 2021 gross international reserves, on the other hand, is estimated to be $114 billion, down from the previous forecast of $115 billion, to account for outflows from the national government’s foreign currency withdrawals from its deposits with the BSP to pay its foreign currency obligations and fund various expenditures.

Abenoja said the forecast also takes into account the infusion of $2.8 billion in Special Drawing Rights following the International Monetary Fund’s allocation to member nations on Aug. 23, 2021.

“Two key risks have affected the latest external sector assessment. One is the rapid spread of the more transmissible Covid-19 Delta variant, which has led to recent spikes in infections. Second, supply and logistical issues in vaccines,” he noted.

The overall BoP position shifted from a $4.1-billion surplus in the first half of last year to a $1.9-billion deficit in the first half of 2021.