MANILA (Reuters) – The Philippine central bank on Friday revised its current account surplus projection for this year to $3.5 billion, or 0.9% of the gross domestic product, down substantially from a June forecast of $10 billion, or 2.5% of GDP.

According to figures shown at a press briefing, the bank now expects next year’s deficit to be $1.4 billion or 0.3% GDP. This is in contrast to its previous projection of a surplus of $6.7 billion equivalent to 1.5% GDP.

Bangko Sentral ng Pilipinas said its latest projections included “downside risks”, which continue to increase, as well as the emergence highly transmissible COVID-19 variations.

In a statement, it stated “The uncertainty that lingers continues to shadow external sector prospects for the near term” as little is known about the course and severity of the pandemic.

Now, the surplus projected for this year in balance payments will be $4.1billion, or 1.1% GDP. This is down from $7.1billion surplus (or 1.8% GDP) previously forecast.

The surplus of the BOP is expected to shrink to $1.7billion in 2022. This compares with the $2.7billion forecast, which was 0.6% of GDP.

BSP has also reduced its estimates for the end-2021 gross international reserves from $115 billion to $117 billion.

The revisions reflect the BSP’s “more guarded” outlook for the global economy and developments at home, including the downscaling of this year’s GDP growth target https://www.reuters.com/article/philippines-economy-idUSL1N2PP0IM, said Zeno Ronald Abenoja, managing director at the central bank’ Department of Economic Research.