The Philippines posted a balance of payments (BOP) deficit of US$167 million in July 2025, reversing the US$62 million surplus recorded in the same month last year, the Bangko Sentral ng Pilipinas (BSP) reported.
The shortfall was mainly attributed to the national government’s foreign currency withdrawals from its deposits with the BSP to meet external debt servicing, highlighting ongoing pressure on the country’s external accounts.
From January to July 2025, the BOP position accumulated a US$5.8 billion deficit, a significant turnaround from the US$1.5 billion surplus in the same period of 2024. According to the BSP, this reflects a persistently wide trade in goods deficit, partially cushioned by steady inflows from OFW remittances, foreign borrowings, and portfolio investments.
The weakening BOP position coincided with a decline in gross international reserves (GIR) to US$105.4 billion as of end-July, down from US$106.0 billion in June. Despite the dip, the BSP assured that reserves remain sufficient, covering 7.2 months’ worth of imports and 3.4 times the country’s short-term external debt.
The BSP emphasized the BOP’s significance as a key indicator of external sector strength, with potential implications for the peso’s stability, inflation expectations, and the country’s overall macroeconomic resilience. Sustaining an adequate BOP is vital for policy space in monetary and fiscal management, especially amid global uncertainties.
