Philippines posts $167M BOP deficit in July 2025

The Philippines recorded a balance of payments (BOP) deficit of USD 167 million (PHP 9.35 billion) in July 2025, reversing the USD 62 million (PHP 3.47 billion) surplus posted in the same month last year.

The Bangko Sentral ng Pilipinas (BSP) said the deficit reflected the national government’s drawdowns on foreign currency deposits with the central bank to settle external debt obligations.

This brought the cumulative BOP position to a USD 5.8 billion (PHP 324.8 billion) deficit from January to July 2025, a turnaround from the USD 1.5 billion (PHP 84 billion) surplus in the same period in 2024.

Preliminary data show that the year-to-date shortfall was largely driven by the country’s trade in goods deficit, which settled at USD 24.0 billion (PHP 1.34 trillion) in January to June 2025.

This was slightly lower than the USD 25.1 billion (PHP 1.40 trillion) trade gap recorded in the same period last year, according to the Philippine Statistics Authority.

The BOP position also mirrored the decline in gross international reserves (GIR), which fell to USD 105.4 billion (PHP 5.90 trillion) as of end-July from USD 106.0 billion (PHP 5.94 trillion) the previous month.

Despite the dip, the BSP said the GIR level remains an adequate external liquidity buffer.

It is equivalent to 7.2 months’ worth of imports of goods and payments of services and primary income, well above the international standard of three months.

The GIR can also cover about 3.4 times the country’s short-term external debt based on residual maturity, ensuring stability against sudden capital outflows.

Foreign exchange reserves are composed of foreign-denominated securities, cash, gold, and other assets, which are used to finance imports, service foreign debt, stabilize the peso, and shield the economy from external shocks.

The BSP said net inflows from overseas Filipinos’ remittances, foreign borrowings by the national government, and foreign portfolio investments partly offset the widening trade gap in the first seven months of the year.

The BOP, which captures all transactions of the Philippines with the rest of the world, is considered a key indicator of the country’s external position and economic resilience.