THE Philippines’ balance of payments (BOP) remained in deficit in September, with the shortfall breaching anew the $3-billion level and hitting nearly two-year high, data from the Bangko Sentral ng Pilipinas (BSP) showed.
At $3.14 billion, the shortfall was markedly higher than the $596-million deficit recorded a month earlier. It is also a reversal from last year’s $82-million surplus.
This is the highest deficit recorded since January 2025’s $4.08 billion shortfall.
The result brought the year-to-date BOP higher to $9.09-billion shortfall, higher than the $5.32 billion recorded in January-September 2025.
“The year-to-date BOP position reflected the continued trade in goods deficit and net outflows from foreign portfolio investments,” the central bank said in a statement.
“These were partly offset by the sustained net inflows from personal remittances of overseas Filipinos, foreign borrowings by the NG, trade in services, and foreign direct investments,” it added.
The BOP is a summary of a country’s transactions with the rest of the world for a specific period. It consists of the current account, which covers trade in goods, services and primary and secondary income (which includes overseas Filipino worker remittances); the capital account — capital transfers and nonfinancial assets; and the financial account or investments from abroad.
The BOP position ended in a $5.7-billion deficit last year, a reversal from 2024’s $609-million surplus.
The central bank lowered its deficit projection this year to $9.2 billion from its previous estimate of $10.7 billion.
It also expects a narrower deficit next year of $8.5 billion from earlier projection of $11.0 billion.
SM Investment Corp. economist Robert Dan Roces said the wider BOP deficit indicates that “dollar outflows continue to exceed inflows.”
“The challenge is not simply to preserve reserves, but to strengthen the dollar inflows that replenish them,” Roces said.
Moreover, Union Bank of the Philippines chief economist Ruben Carlo Asuncion said the likelihood of posting a full-year surplus is now “extremely low.”
“The focus has shifted to whether the final deficit could exceed official projections,” Asuncion said.
“We do not view the latest outturn as a sign of fundamental external-sector weakness, as structural foreign exchange inflows from remittances, BPO revenues, and tourism continue to provide support to the country’s external position,” he added.
GIR drops to $99B
The country’s gross international reserves (GIR), meanwhile, dropped to $99.49 billion as of end-September from $104.85 billion a month earlier.
It was the lowest since September 2023’s $98.12 billion.
Despite the decline, the central bank said this still provides “sufficient foreign currency to meet the country’s import needs, service its external debt obligations, and serve as a buffer against external economic shocks.”
It is also equivalent to about 3.1 times the country’s short-term external debt based on residual maturity and could cover up to 6.2 months’ worth of import of goods and payment of services.
“The decrease was mainly driven by the Bangko Sentral ng Pilipinas (BSP)’s net foreign exchange operations,” the central bank said.
It added that the “downward valuation adjustments, primarily due to changes in the prices of the BSP’s gold holdings and foreign currency–denominated reserve assets and the national government (NG)’s drawdowns on its foreign currency deposits with the BSP for external debt service” also contributed to the decline.
The country ended 2025 with $110.8 billion reserves, higher than the projected $109 billion. It is expected to end 2026 at a lower $104 billion and rise to $105 billion next year.
GIR consists of the BSP’s foreign investments, gold, foreign exchange, reserve position in the International Monetary Fund, and special drawing rights.
It helps “a country finance its imports and foreign debt obligations, stabilize its currency, and provide a buffer against external economic shocks,” the central bank said.
It is considered adequate if it can finance at least three months’ worth of the country’s imports of goods and payments of services and primary income.
It is also considered sufficient if it is enough to pay off all of the country’s foreign liabilities that will fall due in the next 12 months.
