PH records $167-M balance of payments deficit in July

MANILA –The country's balance of payments (BOP), which accounts for the transactions of the country with the rest of the world, recorded a deficit of USD167 million in July this year.

Data released by the Bangko Sentral ng Pilipinas (BSP) late Tuesday showed that this was a reversal from the USD62 million surplus recorded in July 2024.

"The BOP deficit reflected national government's (NG) drawdowns on its foreign currency deposits with the Bangko Sentral ng Pilipinas (BSP) to service external debt obligations," the BSP said.

The deficit during the month brought the year-to-date BOP level to a deficit of USD5.8 billion.

The BSP attributed the deficit to the continued trade in goods deficit.

Data from the Philippine Statistics Authority (PSA) showed that the trade deficit for January to June 2025 settled at USD24 billion, down from the USD25.1 billion deficit posted in the same period last year.

The central bank, however, said this was partly offset by the sustained net inflows from personal remittances from overseas Filipinos, foreign borrowings by the national government, and foreign portfolio investments.

The country's gross international reserves (GIR), meanwhile, declined from USD106.0 billion as of end-June 2025 to USD105.4 billion as of end-July 2025.

Despite the decline, the BSP said the GIR remains an adequate external liquidity buffer, equivalent to 7.2 months' worth of imports of goods and payments of services and primary income.

"Moreover, it covers about 3.4 times the country's short-term external debt based on residual maturity," it said.

GIR are made up of foreign-denominated securities, foreign exchange, and other assets including gold.

GIR help a country finance its imports and foreign debt obligations, stabilize its currency, and provide a buffer against external economic shocks. (PNA)

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