Philippine reserves fall, nine-month BOP deficit reaches USD 9.1 billion

 

By Francis Allan L. Angelo

Philippine gross international reserves fell to USD 99.5 billion at the end of September 2026, while the country recorded a USD 3.1 billion balance of payments deficit for the month, according to the Bangko Sentral ng Pilipinas (BSP).

The reserves provide a foreign currency buffer for imports and external debt payments, helping the country withstand disruptions in overseas financing and earnings. The BSP said the remaining buffer was sufficient, despite a wider payments deficit in the first nine months.

The revised end-September reserve level was lower than the previous month’s, with the BSP identifying four main factors behind the decline.

These included the central bank’s net foreign exchange operations and downward valuation adjustments, primarily from changes in the prices of its gold holdings and foreign currency-denominated reserve assets.

The BSP also cited national government drawdowns on foreign currency deposits with the central bank for external debt service, along with the government’s net foreign currency withdrawals from those deposits.

The USD 99.5 billion reserve stock was equivalent to 6.2 months of imports of goods and payments for services and primary income.

It also covered about 3.1 times the country’s short-term external debt based on residual maturity.

That debt measure includes outstanding external debt originally due within one year, plus principal payments on medium- and long-term public and private sector loans falling due within the next 12 months.

The coverage ratios remained above the conventional adequacy benchmarks described in the BSP’s explanatory guide: three months of imports and related payments, and full coverage of foreign liabilities due within 12 months.

The balance of payments, which records the country’s economic transactions with the rest of the world, posted a USD 3.1 billion deficit in September.

That brought the January–September 2026 deficit to USD 9.1 billion, compared with USD 5.3 billion in the same period of 2025.

The nine-month gap widened by USD 3.8 billion, based on the reported figures.

The BSP attributed the year-to-date position to the continued deficit in goods trade and net outflows from foreign portfolio investments.

These were partly offset by sustained net inflows from overseas Filipinos’ personal remittances, national government foreign borrowings, trade in services, and foreign direct investments.

The reserve stock and the BOP balance measure different things. Reserve values can change because of asset-price adjustments as well as transactions, so the monthly BOP deficit is not automatically equal to the decline in gross reserves.

Gross international reserves consist of eligible foreign assets held by the central bank, including securities, currency and deposits, the reserve position in the International Monetary Fund, gold, special drawing rights, and other reserve assets.