Philippines posts USD 373 million BOP deficit in January

MANILA — The Philippines’ balance of payments (BOP) registered a deficit of USD 373 million in January 2026, the Bangko Sentral ng Pilipinas (BSP) reported on Feb. 19, 2026.

The January 2026 deficit represents a significant improvement from the USD 4,078 million deficit recorded in January 2025, based on BSP data.

Despite the BOP deficit, the country’s gross international reserves (GIR) increased to USD 112.6 billion as of end-January 2026.

This level of reserves remains an adequate external liquidity buffer, equivalent to 7.5 months’ worth of imports of goods and payments of services and primary income.

The GIR level covers about 4.1 times the country’s short-term external debt based on residual maturity.

The BOP deficit means that more dollars flowed out of the country than came in during January, typically due to factors such as import payments exceeding export earnings, debt servicing, and investment outflows.

However, the robust GIR level provides a cushion that helps stabilize the peso and ensures the country can meet its international payment obligations even during periods of BOP deficits.

For ordinary Filipinos, a healthy GIR level helps maintain peso stability, which in turn affects the prices of imported goods including fuel, food, and consumer products.

A strong GIR also signals to international investors and credit rating agencies that the Philippines can weather external economic shocks, potentially keeping borrowing costs lower for the government and businesses.

The BOP accounts for all transactions of the country with the rest of the world, tracking the flow of dollars in and out of the economy.

The GIR are made up of foreign-denominated securities, foreign exchange, and other assets including gold, serving as the country’s financial safety net.

The BSP explained that 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 latest GIR level ensures the availability of foreign exchange to meet balance of payments financing needs, such as payment of imports and debt service, even in extreme cases when there are no export earnings or foreign loans.

Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.

The Philippines recorded a full-year BOP deficit of USD 5,661 million in 2025, compared to a surplus of USD 609 million in 2024, reflecting increased pressure on the country’s external accounts.