By the staff
The Philippines swung to a $5.66 billion balance of payments (BOP) deficit in 2025, reversing a $609 million surplus the year before as weaker capital inflows, softer foreign direct investments and a wider trade gap weighed.
The shortfall was narrower than the Bangko Sentral ng Pilipinas’ (BSP) $6.2 billion projection. In December alone, the BOP deficit reached $827 million, down 45.2% from $1.51 billion a year earlier.
John Paolo Rivera, senior research fellow at the Philippine Institute for Development Studies, said the latest 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.”
Trade data showed the trade deficit widened to $49.963 billion in the January–November period, compared with $48.414 billion a year earlier.
Rivera said the December shortfall likely mirrored seasonal factors, including “year-end debt servicing, profit repatriation and portfolio rebalancing, which are typical toward the close of the year.”
“That said, GIR maintained by BSP indicates that external buffers remain strong and adequate to cover imports and external obligations,” he added.
The BSP said gross international reserves (GIR) stood at $110.8 billion at end‑December, down slightly from $111.25 billion in November. Despite the dip, reserves remain sufficient, covering 7.4 months of imports and 3.9 times the country’s short‑term external debt.
Rivera said the BOP trajectory would depend on foreign direct investment recovery, export performance, remittance growth and global financial conditions.
“While near-term pressures from global uncertainty and peso weakness may persist, a pickup in investments and exports could help narrow the deficit this year, with GIR expected to remain broadly stable barring major external shocks,” he said.
