The country's current account deficit narrowed last year as the trade-in-goods balance improved, supported by strong export growth and higher income from overseas Filipinos, the Bangko Sentral ng Pilipinas (BSP) said late Friday.
At $16.3 billion, the shortfall dropped from the $18.6 billion recorded a year earlier and was equivalent to 3.3 percent of gross domestic product (GDP). It is, however, slightly wider than the $15.5 billion expectation of the central bank for the year.
The central bank said the decline was “supported by an improved trade in goods balance on the back of robust export growth as well as higher income receipts from overseas Filipinos, consistent with record full year cash remittances in 2025.”
“Remittances continued to shore up household consumption and provided a buffer against external headwinds,” it said.
The trade in goods deficit contracted by 3.2 percent to $66.7 billion in 2025 from $68.9 billion in 2024, “as the growth in exports outpaced that of imports.”
Meanwhile, net receipts from services declined by 4.5 percent to $13.2 billion in 2025 from $13.9 billion, “as the expansion in services imports outpaced the growth in exports.”
Primary income contracted by 6.1 percent to $4.5 billion in 2025 from $4.7 billion.
“The decline mainly reflected higher dividend payments to direct investors and increased interest payments on nonresidents’ portfolio investments,” the central bank said.
The secondary income account, meanwhile, grew by 3.1 percent to $32.7 billion from $31.7 billion in 2024 due to “record-high remittance inflows from nonresident OF workers, which increased by 3.3 percent year on year to $30.8 billion.”
The BSP said the current account deficit was likely to be narrower at $15.3 billion this year.
The current account is a component of the balance of payments (BOP), which is a summary of a country's economic transactions with the rest of the world.
The country’s balance of payments (BOP) position ended in a $5.7-billion deficit last year but was smaller than what the Bangko Sentral ng Pilipinas (BSP) had projected.
The result, a reversal from 2024’s $609-million surplus, came as the shortfall markedly widened to $827 million in December from $225 million a month earlier.
The BSP had forecast a full-year deficit of $6.2 billion.
