By Katherine K. Chan, Reporter
STEADY INFLOWS from remittances and the services sector despite emerging external pressures helped narrow the Philippines’ balance of payments (BoP) gap to a three-month low in April, Bangko Sentral ng Pilipinas (BSP) data showed.
Based on central bank data released on Tuesday, the country’s BoP gap narrowed to $2.124 billion last month from the $2.637-billion deficit in March and $2.558-billion shortfall in April last yr.
This was the narrowest deficit recorded for the reason that $373 million seen in January. It also marked the sixth consecutive month that the country’s BoP position settled at a shortfall.
Within the 4 months to April, the Philippines’ BoP deficit widened to $7.411 billion from $5.516 billion in the identical period a yr ago.
BoP refers back to the country’s economic transactions with other nations. A deficit shows that the country spent greater than it received, while a surplus indicates more funds entered the country.
Stable dollar inflows from remittances and business process outsourcing, barely higher capital flows and softer import bill could have helped narrow the country’s BoP deficit in April, Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said via Viber.
Nonetheless, Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said the broader four-month deficit was likely because of lingering external pressures considering the country’s large trade gap.
“The narrower BoP deficit in April reflects some normalization after earlier outflows, but the broader year-to-date gap highlights persistent external pressures, particularly from the country’s large trade deficit amid strong import demand and softer exports,” he said in a Viber message.
“While remittances and services proceed to offer support, these haven’t been enough to offset the present account shortfall, with capital flows remaining sensitive to global conditions,” Mr. Asuncion added.
Separate BSP data showed remittances from Filipinos abroad rose by 2.3% yr on yr to $2.874 billion in March, the best in two months.
Latest available data showed the country’s trade-in-goods deficit widened to a six-month high of $4.512 billion in March from $4.015 billion in February and $4.509 billion a yr ago.
DOLLAR RESERVES
Meanwhile, revised BSP data showed the Philippines’ dollar reserves fell to its lowest level in over a yr, which analysts said was likely because of the central bank’s recent intervention within the foreign exchange market.
As of end-April, the country had $104.328 billion in gross international reserves (GIR), barely higher than the $104.128 billion earlier reported.
Nonetheless, it was still a 2.16% decline from the $106.636-billion foreign reserves in March and a 0.93% dip from the $105.308 billion in April 2025.
The top-April tally was the bottom GIR level in 15 months or for the reason that $103.271 billion logged in January last yr.
“The decline in GIR indicates that the BSP could have used a part of its reserves to smooth peso volatility and meet external obligations,” John Paolo R. Rivera, a senior research fellow on the Philippine Institute for Development Studies, said in a Viber message.
The central bank earlier said it stays present within the foreign exchange market to stop sharp swings that might stoke inflation because the Middle East war continues to weigh on the currency.
On Tuesday, the peso closed at P61.75 against the dollar, unchanged from its record-low finish on Monday, Bankers Association of the Philippines data showed.
Still, based on the BSP, the country’s latest GIR level “provides a strong external liquidity buffer.”
The top-April reserves translated to six.9 months’ price of imports of products and payments of services and first income, exceeding the three-month standard.
It may possibly also cover about 3.8 times the country’s short-term external debt based on residual maturity.
GIR comprises foreign-denominated securities, foreign exchange, and other assets corresponding to gold. It enables a rustic to finance imports and foreign debts, maintain the steadiness of its currency, and safeguard itself against global economic disruptions.
For Mr. Ravelas, the country’s BoP position will likely remain in a deficit in the approaching months considering the economy’s heavy reliance on imports.
“The important thing message here is just not elimination, but manageability — our external position stays ‘deficit but resilient,’ supported by strong fundamentals like remittances, services exports, and adequate reserves,” he added. “So, going forward, it’s about watching global conditions and capital flows closely, while ensuring we sustain these stable sources of FX (foreign exchange).”
SM Investments Corp. Group Economist Robert Dan J. Roces likewise projects a continued deficit within the near term as “high oil prices, elevated global uncertainty, and a still-strong dollar proceed to pressure the trade balance and keep demand for dollars firm.”
Nonetheless, the deficit could also be “smaller and more manageable” because the country continues to carry ample GIR and because of regular flows from remittances and services exports, he added.
“The BoP may stay in deficit within the near term, though a smaller and more manageable one,” Mr. Roces said. “The excellent news is that the country still has ample buffers through GIR, regular remittances, and recurring inflows from services exports, which help prevent external pressures from becoming destabilizing.”
The central bank expects the country’s BoP position to finish at a $7.8-billion deficit or -1.5% of its gross domestic product (GDP) this yr, wider than the $5.661-billion gap or -1.2% of GDP in 2025.
It also projects the GIR level to succeed in $111 billion by yearend, higher than the $110.8 billion recorded last yr.