THE Philippines’ balance of payments (BOP) remained in deficit in August, but the shortfall narrowed, data from the Bangko Sentral ng Pilipinas (BSP) showed.
At $596 million, the shortfall was lower than the $1.47-billion deficit recorded a month earlier. It is, however, a reversal from last year’s $359-million surplus.
The result brought the year-to-date BOP higher to $5.94-billion shortfall, higher than the $5.39 billion recorded in January-August 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.
“These were partly offset by the sustained net inflows from personal remittances of overseas Filipinos, foreign borrowings by the NG (national government), trade in services, and foreign direct investment,” 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 expects the BOP deficit to widen this year to $10.7 billion, up from the $7.8-billion outlook three months earlier. The forecast for next year was set at $11.0 billion.
The country’s gross international reserves (GIR), meanwhile, rose to $104.85 billion as of end-August from $103.32 billion a month earlier. This is the highest recorded since March 2026’s $106.64 billion.
These provide “sufficient reserves to meet the country’s import needs, service its external debt obligations, and serve as a buffer against external economic shocks,” the central bank said.
It is also equivalent to about 3.3 times the country’s short-term external debt based on residual maturity and could cover up to 6.6 months’ worth of import of goods and payment of services.
“The increase in reserves was mainly driven by upward valuation adjustments in the Bangko Sentral ng Pilipinas’ gold holdings due to the increase in the price of gold in the international market,” the central bank said.
It added that “BSP’s higher net income from its investments abroad as global bond yields increased,” also contributed to the increase.
The country ended 2025 with $110.8 billion reserves, higher than the projected $109 billion. The country’s foreign reserves are expected to end 2026 at a lower $104 billion instead of $111 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.
