By Luisa Maria Jacinta C. Jocson, Reporter
THE PHILIPPINES in January posted its biggest balance of payments (BoP) deficit in over a decade, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.
The BoP deficit stood at $4.1 billion in January, ballooning from the $740-million gap in the identical month a yr ago.
It was also nearly triple the $1.5-billion deficit posted in December.
This marked the widest BoP deficit in 11 years or for the reason that $4.48-billion shortfall in January 2014.
The BoP summarizes the country’s transactions with the remaining of the world. A deficit means more funds left the country, while a surplus shows that extra money got here in.
“The BoP deficit in January 2025 reflected the BSP’s net foreign exchange operations and drawdowns by the National Government (NG) on its foreign currency deposits with the BSP to fulfill its external debt obligations,” the central bank said.
Latest data from the Bureau of the Treasury showed the NG’s outstanding debt hit P16.05 trillion at the top of 2024, up by 9.8% from P14.62 trillion at end-2023.
Earlier BSP data showed the country’s outstanding external debt hit a record high of $139.64 billion as of end-September. This brought the external debt-to-GDP ratio to 30.6% at the top of the third quarter.
The external debt service burden jumped by 14% to $15.735 billion within the 11-month period, based on the most recent central bank data.
Michael L. Ricafort, chief economist at Rizal Business Banking Corp., said the broader BoP deficit was also attributable to the recent peso volatility.
The peso depreciated to P58.365 at end-January, weaker by 52 centavos from the P57.845 finish at end-December.
“The BoP deficit for January is primarily attributable to interest and debt payments, which may also be regarded as foreign exchange intervention by the central bank to keep up the Philippine peso’s stability against the US dollar,” Oikonomia Advisory and Research, Inc. economist Reinielle Matt M. Erece said.
“This entails large withdrawals of the country’s money reserves to pay its obligations and meet its targets,” he added.
At its end-January position, the BoP reflects a gross international reserve (GIR) level of $103.3 billion, down by 2.8% from $106.3 billion as of end-2024.
Mr. Ricafort said the relatively higher GIR provided “greater cushion for the peso exchange rate vs. the US dollar.”
This was supported by the “continued growth within the country’s structural US dollar inflows especially from overseas Filipino employee remittances, business process outsourcing revenues, foreign tourism receipts and foreign investments, amongst others.”
Despite the decline, the dollar buffer is sufficient to pay for 7.3 months’ value of imports of products and payments of services and first income.
The reserves can even cover about 3.7 times the country’s short-term external debt based on residual maturity.
For the approaching months, the BoP position could improve attributable to the NG’s latest global bond issuance, Mr. Ricafort said.
The Philippines raised $3.3 billion from the sale of dual-tranche US-dollar global bonds, in addition to a euro sustainability bond, in late January.
In 2024, the country’s full-year BoP position stood at a surplus of $609 million, falling by 83.4% from the $3.672-billion surplus at end-2023.
This yr, the BSP expects a $2.1-billion surplus position, such as 0.4% of economic output.
