BOP swings to $298-Million deficit in May

The Bangko Sentral ng Pilipinas (BSP) reported a $298-million balance of payments (BOP) deficit in May, driven by the national government’s foreign currency withdrawals to service external debt. Despite this, the country’s gross international reserves (GIR) remained healthy, the central bank said Thursday.

The BOP tracks the Philippines’ economic transactions with the rest of the world over a specific period and may reflect a surplus, deficit, or balance depending on inflows and outflows.

With May’s shortfall, the cumulative BOP position turned from a $1.6-billion surplus in the first five months of 2024 to a $5.8-billion deficit for the same period this year.

“Preliminary data indicate that the year-to-date BOP deficit was largely due to the continued trade in goods deficit,” the BSP explained. From January to April 2025, the trade gap stood at $15.91 billion, according to data from the Philippine Statistics Authority.

The BSP noted, however, that inflows from overseas Filipinos’ personal remittances, foreign borrowings by the government, and foreign portfolio investments helped cushion the deficit.

The BOP deficit corresponded to a slight dip in GIR, which inched down to $105.2 billion in May from $105.3 billion in April.

“Despite the modest decline, the GIR level remains a strong external liquidity buffer, sufficient to cover 7.1 months’ worth of imports of goods and payments of services and primary income,” the BSP said, adding it also covers about 3.3 times the country’s short-term external debt based on residual maturity.

By international standards, a GIR level that can support at least three months of imports is considered adequate.