THE country’s balance of payments (BOP) position started the year in a deficit, latest Bangko Sentral ng Pilipinas (BSP) data showed on Thursday.
At $373 million, the January shortfall was lower than last year’s $4.08 billion and last month’s $827-million deficit.
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.
Reyes Tacandong & Co. senior adviser Jonathan Ravelas said the BOP is still in deficit mainly because imports are outpacing exports.
“This isn’t a crisis signal; it’s a growth-related deficit, and our external buffers remain solid,” Ravelas said. “Looking ahead, the BOP will likely stay in the red in the near term but should stabilize as exports recover, tourism picks up, and investment reforms gain traction.”
“The key now is to boost export competitiveness and attract more long-term investments, rather than overreacting to the headline number,” he added.
The country’s 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 $5.9 billion from a previous projection of $3.4 billion.
The country’s gross international reserves (GIR), meanwhile, rose to $112.6 billion as of end-January from $110.8 billion a month earlier.
The level “remains an adequate external liquidity buffer,” the central bank said, as it is enough for 7.5 months’ worth of merchandise imports and payments of services and primary income.
It is also equivalent to about 4.1 times the country’s short-term external debt based on residual maturity.
The country ended 2025 with $110.8 billion reserves, higher than the projected $109 billion. The country’s foreign reserves are expected to end this year at $110 billion.
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.