PH Posts $298M BOP Deficit in May 2025

The Philippines recorded a balance of payments deficit of USD298 million (approximately PHP17.5 billion) in May 2025, reversing a surplus of USD2 billion during the same month last year, according to data released by the Bangko Sentral ng Pilipinas.

The deficit was mainly due to the national government’s drawdowns on its foreign currency deposits with the central bank to pay off external debt obligations.

This pushed the cumulative BOP position from January to May 2025 to a deficit of USD5.8 billion, a stark contrast to the USD1.6 billion surplus posted during the same period in 2024.

Preliminary data point to the country’s persistent trade in goods deficit as the primary driver of the year-to-date BOP shortfall.

However, sustained net inflows from overseas Filipino remittances, foreign borrowings by the national government, and foreign portfolio investments helped cushion the decline.

The BOP figures also mirrored a marginal dip in gross international reserves, which fell to USD105.2 billion at the end of May 2025 from USD105.3 billion a month earlier.

Despite the decline, the reserves remain a robust external liquidity buffer, equivalent to 7.1 months’ worth of imports and payments for services and primary income.

The current GIR level is also sufficient to cover 3.3 times the country’s short-term external debt based on residual maturity, according to the central bank.

Data from the Philippine Statistics Authority show the country’s trade deficit for January to April 2025 stood at USD15.91 billion, slightly narrower than the USD15.99 billion deficit during the same period in 2024.

The gross international reserves, composed mainly of foreign-issued securities, gold holdings, and foreign exchange, serve as a key indicator of the country’s capacity to weather external financial shocks.