The Philippines’ balance of payments (BOP) recorded a deficit of $2.6 billion in the second quarter of 2025, reversing a $1.2-billion surplus in the same period last year.
The shift to a deficit, which reflects the difference between money flowing into and out of the country, was primarily due to lower net inflows in the financial account. Local banks extended more loans to overseas borrowers and settled some foreign obligations, as seen in the other investment account.
Declines in net inflows from portfolio and direct investments also weighed on the financial account, as rising global uncertainty made investors more cautious, the Bangko Sentral ng Pilipinas said.
Meanwhile, the current account deficit narrowed in the second quarter, supported by increased trade in goods. The current account tracks the flow of goods, services, income and current transfers.
The BSP said that in the first half of 2025, the BOP registered a $5.6-billion deficit, a reversal from the $1.4-billion surplus in the first half of 2024. This was led by lower net financial account inflows and a wider current account deficit.
The financial account’s net inflows fell as residents’ investments in foreign debt securities moderated. Net inflows from other investments dropped as banks provided more loans to non-residents.
The current account deficit widened due to a larger trade in goods gap, as imports increased amid resilient domestic demand and sustained economic growth. Lower net receipts from the trade in services also contributed to this, the BSP said.
