The country’s overall balance of payments (BOP) posted a higher deficit of USD4.1 billion in January, compared to the USD740 million deficit recorded in the same period last year. The Bangko Sentral ng Pilipinas (BSP) attributed this development primarily to its net foreign exchange operations and the national government’s drawdowns from foreign currency deposits to meet external debt obligations.
The BOP deficit in January 2025 also led to a decline in the country’s gross international reserves (GIR), which stood at USD103.3 billion at the end of January, down from USD106.3 billion at the close of 2024. Despite the drop, the BSP emphasized the current GIR level remains a robust buffer, representing 7.3 months’ worth of imports of goods and services as well as primary income payments. The reserves also stand at 3.7 times the nation’s short-term external debt based on residual maturity, ensuring ample liquidity for the country’s external financing needs.
The BSP asserted that the diminution in reserves is manageable, reflecting ongoing efforts to maintain sufficient external buffers amid the pressures of foreign exchange transactions and debt servicing. The central bank’s actions are in line with its commitment to safeguarding the economy’s stability and ensuring the availability of foreign exchange in times of extreme conditions.
Data show the country’s debt obligations rising 14 percent in November last year to USD15.7 billion from only USD13.8 billion in 2023 as a result of higher interest and principal payments on the IOUs. Principal payments alone rose 13 percent to USD8.4 billion even as interest payments increased 15 percent to USD7.3 billion.
The local currency, the peso, has also been severely weakened to only P58.391 per USD in January this year versus its year-ago value of P55.972 per USD.
The latest BOP data underscores the BSP’s critical role in managing monetary policy, liquidity, and external obligations, with the central bank remaining vigilant in ensuring that the Philippines’ reserves are adequate for financing the country’s external obligations.
