The country posted a US$5.3-billion balance of payments (BOP) deficit in the first nine months of 2025, equal to 1.5 percent of GDP, as tighter global financial conditions and trade uncertainties weighed on the external sector.
The BOP records all transactions between the country and the rest of the world. It is made up of the current account (trade in goods and services, income flows), the financial account (investments and loans), and the capital account (grants and other one-off transfers).
The deficit was driven mainly by a US$12.5-billion current account shortfall, or 3.6 percent of GDP, as imports of telecommunications equipment, electrical machinery, and passenger vehicles outpaced exports. Exports, however, remained supported by strong global demand for manufactured goods, minerals, and electronics. Remittances from overseas Filipinos and receipts from BPO and travel services helped cushion the gap.
The financial account partly offset the current account deficit, posting a net inflow of US$12.2 billion (3.5 percent of GDP) on the back of steady foreign direct and portfolio investments and government foreign borrowings.
The deficit signals that more foreign exchange is leaving the economy than entering it. Persistent deficits can put downward pressure on the currency, raise borrowing costs, and make the country more vulnerable to shifts in global markets.
However, strong financial inflows suggest continued investor confidence, helping stabilize the external position despite the trade gap.
