BoP deficit sharply narrows in Nov.

By Katherine K. Chan

THE Philippines’ balance of payments (BoP) deficit sharply narrowed in November amid higher remittance inflows during the holidays, the Bangko Sentral ng Pilipinas (BSP) reported late Friday.

Preliminary central bank data showed the BoP deficit stood at $225 million in November, sharply narrowing from the $2.276-billion gap seen in the same month last year.

“The Philippines’ balance of payments registered a modest deficit of $225 million in November 2025,” the central bank said in a statement.

Month on month, the BoP position swung to a deficit from the $706-million surplus posted in October.

November marked the first time in four months that the country’s BoP position fell to a deficit or since the $167-million gap in July.

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.

John Paolo R. Rivera, senior research fellow at the Philippine Institute for Development Studies, attributed the BoP deficit in November to increased import demand amid the holiday season, as well as debt repayments and portfolio outflows.

“While this snapped a short surplus streak, it does not signal a structural shift as remittances and services exports remain supportive,” he said via Viber.

In the January-to-November period, the country’s BoP position swung to a $4.834-billion deficit, from the $2.117-billion surfeit a year ago.

Robert Dan J. Roces, an economist at SM Investments Corp., said the country’s BoP cumulative deficit widened as “imports and financial outflows arrived earlier and faster than exports and inflows.” 

This, he noted, does not indicate a weakening of the country’s external buffers.   

“While November’s sharp narrowing was helped by seasonal remittance inflows, portfolio adjustments, and some easing in import payments, the year-to-date gap was driven by earlier front-loaded imports of capital goods and energy, a weaker trade balance amid softer global demand, and episodic portfolio outflows during periods of higher US yields and FX (foreign exchange) volatility,” Mr. Roces added in a Viber message.

In the months ahead, Mr. Rivera said reduced seasonal imports and better global financial conditions may help stabilize the country’s BoP.

“BoP may stay volatile in the near term, but should stabilize as seasonal imports ease and if global financial conditions remain favorable; sustained improvement will depend on stronger investment inflows and steady export performance,” he said.

The central bank expects the overall BoP position to end at a $6.9-billion deficit or -1.4% of the country’s gross domestic product by yearend.

MORE DOLLAR RESERVES
Meanwhile, the country’s gross international reserves (GIR) rose to $111.3 billion in the 11-month period from $110.2 billion the previous month.

As of end-November, the level of dollar reserves translated to 7.4 months’ worth of imports of goods and payments of services and primary income, exceeding the three-month standard.

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

It also covers around 4.0 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 central bank expects GIR to settle at $105 billion this year.