The Philippines’ balance of payments (BOP) incurred a $4.1-billion deficit in January 2025, significantly larger than the $740-million shortfall seen in January 2024, the Bangko Sentral ng Pilipinas (BSP) said Thursday.
The BOP deficit in January 2025 reflected the BSP’s net foreign exchange operations and drawdowns by the national government (NG) on its foreign currency deposits with the BSP to meet its external debt obligations.
It also showed a decrease in the final gross international reserves (GIR) level to $103.3 billion as of end-January 2025 from $106.3 billion a year ago.
The latest GIR level still represented a more than adequate external liquidity buffer equivalent to 7.3 months’ worth of imports of goods and payments of services and primary income, the BSP said.
It was also about 3.7 times the country’s short-term external debt based on residual maturity.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the latest BOP and GIR data were supported by the continued growth in the country’s structural US dollar inflows such as OFW remittances, BPO revenues, exports, foreign investments and foreign tourism revenues.
“For the coming months, BOP data could still improve with the continued increase/growth in the country’s structural inflows as the economy reopens/recovers further towards greater normalcy, in terms of the continued year-on-year growth OFW remittances,” he said.
“Going forward, the country’s net foreign direct investments [FDIs] could still pick up, after coming from among the highest levels since the pandemic started, as the economy reopened towards greater normalcy, Philippine economy still expected to have one of the fastest economic growth rates in the region, the country’s attractive demographics, economic reopening of China [which is the world’s second biggest economy] since December 2022, investment commitments obtained by the new administration from overseas visits/trips in recent months,” said Ricafort.