Philippines’ BoP position swings to deficit in 2025

By Katherine K. Chan, Reporter

The Philippines’ balance of payments (BoP) deficit in 2025 settled below the central bank’s full-year forecast despite posting a wider deficit in December.

Data from the Bangko Sentral ng Pilipinas (BSP) showed that the country’s BoP position swung to a $5.661-billion deficit, a reversal from the $609-million surplus seen in 2024.

This was narrower than the central bank’s projection of a $6.2-billion gap or -1.3% of the country’s gross domestic product (GDP).

In December alone, the BoP deficit narrowed year on year to $827 million from $1.508 billion.

However, it widened from the $225-million shortfall recorded in November.

“The Philippines’ balance of payments registered an $827 million deficit in December 2025, bringing the full‑year outcome to a $5.7 billion deficit,” the BSP said in a statement on late Monday.

BoP refers to the country’s economic transactions with other nations. A surplus indicates more funds entered the country, while a deficit shows that the country spent more than it received.

For 2026, the BSP expects the overall BoP position to end at a $5.9-billion deficit or -1.2% of the Philippine GDP.

RECORD-HIGH DOLLAR RESERVES

Meanwhile, the central bank’s dollar reserves stood at $110.833 billion as of end-2025, 4.31% higher than the $106.257 billion logged the prior year.

This marked a new all-time high gross international reserves (GIR) level on an annual basis, breaking the previous record of $110.117 billion at end-2020.

The dollar reserves level in 2025 also exceeded the BSP’s estimate of $109 billion for the year.

At end-December, the country’s GIR level translated to 7.4 months’ worth of imports of goods and payments of services and primary income, well above the three-month standard.

“Specifically, the latest GIR level ensures the availability of foreign exchange to meet balance of payments financing needs, such as for payment of imports and debt service, in extreme cases when there are no export earnings or foreign loans,” the central bank said.

It is also enough to cover about 3.9 times the country’s short-term external debt based on residual maturity.

GIR comprises foreign-denominated securities, foreign exchange, and other assets such as gold. It enables a country to finance imports and foreign debts, maintain the stability of its currency, and safeguard itself against global economic disruptions.

The BSP sees the GIR level reaching $110 billion by end-2026.