Balance of payments suffers $1.5-B deficit

For the first time in three months, the  Philippines’ balance of payments (BoP) position dived to a new low last July,  the Bangko Sentral ng Pilipinas (BSP) has confirmed.

According to the data released last Wednesday by the BSP, the  country’s BoP position stood at a $1.47-billion deficit in July, a reversal from the $3.403-billion surplus in June.

Year on year, the BoP gap ballooned from $167 million.

This was the first time since April that the monthly BoP position stood at a deficit.

“The overall balance of payments, which captures the transactions of the country with the rest of the world, recorded a $1.5-billion deficit in July 2026,” the BSP said in a statement.

BoP refers to the country’s  transactions with other nations. A deficit shows that the country spent more than it received, while a surplus indicates more funds entered into the country.

The balance of payments will soon suffer another setback with US President Donald Trump`s announcement that he will impose “tremendous“ punishment on any country that helps or does business with Iran.

The Philippines exported $66 million in goods to Iran in 2024, up from $38 million the year prior.  Imports were under $190,000, according to the PSA.

Economists noted that the deficit figure reflected the country’s persistent trade gap, portfolio investment outflows, and external debt-related payments.

The reversal was also attributed to higher foreign exchange outflows, including external debt payments and stronger dollar demand for imports.

In the seven months to July, the country’s deficit stood at $5.347 billion, narrower than the $5.756-billion gap in the comparable year-ago period.

“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 (OFs), foreign borrowings by the NG (National Government), trade in services, and foreign direct investment,” it added.

The Philippines’ trade-in-goods balance, or the difference between the values of exports and imports, ballooned to a $30.81-billion gap as of end-June from $24.48 billion a year ago.