The Philippines posted a balance of payments (BOP) shortfall of US$5.6 billion in the first half of 2025, marking a sharp reversal from the US$1.4-billion surplus in the same period last year, according to the Bangko Sentral ng Pilipinas (BSP).
The shift underscores a growing asymmetry in the country’s external accounts, as financial outflows outweighed gains in trade.
In the second quarter alone, the BOP deficit hit US$2.6 billion, a stark contrast to the US$1.2-billion surplus in Q2 2024.
The BSP attributed the deterioration mainly to weaker net inflows in the financial account, particularly under “other investments,” as local banks increased overseas lending and settled foreign obligations. Net inflows from portfolio and direct investments also declined, reflecting investor caution amid heightened global financial uncertainty.
While the current account deficit narrowed during the quarter—thanks to stronger goods exports—it widened overall in the first half due to rising imports on the back of robust domestic demand and slower services receipts.
The central bank emphasized the importance of monitoring capital flows, noting that persistent imbalances in the financial account could exacerbate external vulnerabilities, even as the current account stabilizes.
