Exploring the Balance of Payments: A Key Indicator of Economic Performance, Global Interdependence, and Trade Dynamics

Abstract

This case study examines the Balance of Payments (BOP), exploring its components, the factors influencing its equilibrium or disequilibrium, and its implications for economic development in the Philippines. Using a systematic literature review approach, we analyze key sectors such as remittances, tourism, and BPO services, and their contributions to the current account. The study also evaluates government policies on foreign direct investment (FDI), the role of the Bangko Sentral ng Pilipinas (BSP) in managing exchange rate volatility, and the broader economic implications of BOP dynamics. This case study highlights the importance of managing the BOP for economic stability and offers recommendations for improving the country's financial position to sustain long-term development.

Keywords: Balance of Payments, Bangko Sentral ng Pilipinas, BPO, Economic Development, Economic Stability, Foreign Direct Investment, Philippines, econonmy, remittance, ofw, stability, current account, financial account, capital account, interdependence