The Philippines recorded a balance of payments deficit of $827 million in December 2025, bringing the full-year shortfall to $5.66 billion, the Bangko Sentral ng Pilipinas said Tuesday.
It was a reversal of the $609-million BOP surplus in 2024 and $3.672 billion in 2023. The BSP said the nation’s liquidity buffers remain robust despite the BOP deficit.
Philippine Institute for Development Studies (PIDS) senior research fellow John Paolo Rivera said the BOP position reflects a mix of weaker capital inflows, softer foreign direct investments (FDI) and continued portfolio investments net outflows, along with a wide import-driven trade deficit.
Rivera said the December deficit also accounts for the country’s year-end debt servicing, profit repatriation and portfolio rebalancing.
Gross international reserves settled at $110.8 billion at the end of December, providing what the BSP described as an adequate cushion against external economic shocks.
Rivera said this indicates that external buffers remain strong and adequate to cover both imports and external obligations.
The current reserve level is equivalent to 7.4 months’ worth of imports of goods and payments of services and primary income.
The reserves also cover about 3.9 times the country’s short-term external debt based on residual maturity. This includes debt with original maturities of one year or less and principal payments on medium- and long-term loans due within the next 12 months.
The BSP said the $110.8 billion reserve level ensures the availability of foreign exchange to meet financing needs, including import payments and debt service, even in extreme scenarios where export earnings or foreign loans are unavailable.
The country’s reserves consist of foreign-denominated securities, foreign exchange, and other assets such as gold. These assets are intended to maintain dollar liquidity, manage currency volatility, and protect the economy from global fluctuations.
Rivera said the country’s BOP position would likely depend on FDI recovery, export performance, remittance growth, and global financial conditions, such as those concerning US interest rates.
“While near-term pressures from global uncertainty and [the peso’s] weakness may persist, a pickup in investments and exports could help narrow the deficit this year, with GIR expected to remain broadly stable barring major external shocks,” said Rivera.
