BOP swings to $5.66 billion deficit in 2025

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January 21, 2026 | 12:00am

MANILA, Philippines — The country’s balance of payments (BOP) position swung to a deficit of $5.66 billion in 2025, a sharp reversal of the $609-million surplus recorded in 2024, data from the Bangko Sentral ng Pilipinas (BSP) showed.

Still, the full-year outturn was better than the central bank’s $6.2-billion deficit forecast.

For December alone, the country posted a BOP deficit of $827 million, 45.2 percent better than the $1.51-billion shortfall recorded in the same month in 2024.

The BOP is a record of the country’s transactions with the rest of the world for a specific period.

A deficit means more dollars flowed out to pay for the importation of more goods, services and capital than what flowed into the country from exports, remittances from overseas Filipino workers, business process outsourcing earnings and tourism receipts.

John Paolo Rivera, senior research fellow at the Philippine Institute for Development Studies, said the BOP performance reflected “a mix of weaker capital inflows, softer foreign direct investment and continued net outflows from portfolio investments, alongside a persistently wide trade deficit driven by imports.”

Latest data from the Philippine Statistics Authority showed the country’s trade deficit amounted to $49.96 billion in the January to November period last year, wider than the $48.41 billion in the same period in 2024.

Rivera said the December deficit likely reflected year-end debt servicing, profit repatriation and portfolio rebalancing, which are typical toward the close of the year.

“That said, GIR maintained by BSP indicate that external buffers remain strong and adequate to cover imports and external obligations,” he added.

The BOP position reflects a decrease in the final gross international reserves (GIR) level of $110.8 billion as of end-December, slightly lower than the $111.25-billion level as of end-November last year.

The GIR level represents a more than adequate external liquidity buffer equivalent to 7.4 months’ worth of imports of goods and payments of services and primary income. It is also about 3.9 times the country’s short-term external debt based on residual maturity.

The country’s dollar reserves are made up of foreign-denominated securities, foreign exchange and other assets including gold.

“GIR help ensure sufficient dollar liquidity to meet import needs and foreign debt obligations, address currency volatility, and provide a buffer against external economic shocks,” the BSP said.

Looking ahead, Rivera said the BOP outlook would depend on the recovery of foreign direct investments, export performance, remittance growth and global financial conditions, particularly US interest rates.