The Philippines’ balance Payment (BOP) Jobs $167 million deficit in July The central bank said Tuesday that the government paid off its foreign debt.
Preliminary data from Bangkok Sentral NG Pilipinas (BSP) showed that the BOP position had a deficit of $167 million in July, a reversal of $226 million in June and a $62 million surplus in July 2024.
“The BOP deficit reflects the gradual decline in foreign currency deposits from the National Government (NG) to serve foreign debt obligations,” the BSP said in a statement.
In the first seven months, the BOP deficit expanded to $5.756 billion, marking a reversal of the $150.4 million surplus from January to July last year.
BOP refers to the economic transactions between the country and other countries. The surplus indicates that the country has more funds into the country, while the deficit indicates that the country spends more than the fees received.
“Preliminary data show that the BOP deficit at the beginning of the year was mainly due to continued trade in the commodity deficit,” the central bank said.
The difference between the balance of merchandise trade in the Philippines or the value of imports was a $3.95 billion deficit in June based on data from the Philippine Bureau of Statistics.
In the first semester, the trade deficit narrowed to $23.97 billion from a year ago.
“This (BOP deficit) is partially offset by the continued net inflows from individual remittances from overseas Filipinos, foreign borrowing from NG and foreign portfolio investment,” the BSP added.
This is because of “global trade uncertainty, enhanced geopolitical risks and weakened investor confidence,” BSP said.
Earlier this year, the central bank revised its 2025 BOP forecast to a $6.3 billion deficit and put its gap to $280 million in 2026.
“The latest BOP deficit is (in part) due to certain foreign currency debt and other foreign obligations (and) continuing tradef“In recent months, the country has had ICIT and net imports in the country,” Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in an email.
He also noted that the deficit is “amid the ongoing Trump risk factor or premium, which has led to some market volatility around the world given the August 7 deadline for the U.S. trade agreement and tariffs.”
John Paolo R. Rivera, a senior fellow at the Philippine Development Institute, said the BOP deficit “reflects the growing pressure on trade imbalances and external payments, especially with increased imports and weaker exports, which may be some debt-related output.”
“It’s a reminder that global uncertainty and tariff risks continue to put pressure on our external sectors,” he said through Viber.
“Although the National Government and BSP still have tools to stabilize BOPs, such as promoting tourism, remittances and managing capital flows, the outlook remains cautious. There are no stronger exports or more stable Philippine peso, The deficit may persist in the short term. ” he added.
BSP expects BOP’s overall position to be at $6.3 billion this year, accounting for -1.3% of GDP.
Jill descends
At the same time, the country’s total international value Reserves (GIR) slips to $100.4 billion It started at the end of June at $1006 billion.
“The level of GIR is still an adequate external liquidity buffer, equivalent to 7.2 months of payments for goods imports and services and first-time income,” said BSP. “In addition, it covers 3.4 times the short-term foreign debt based on the remaining maturity.”
GIR includes foreign-based securities, foreign exchange and other assets, such as gold. It enables a country to maintain stability in its currency for imports and foreign debt, and protect itself from global economic destruction.
The central bank expects Jill to reach $100.4 billion by the end of 2025. – Katherine K. Chen
