Philippine payments position swings to deficit in March 2025

The Philippine payments position swung to a deficit in March due to the national government’s drawdowns on its foreign currency deposits with the Bangko Sentral ng Pilipinas (BSP), data released by the central bank on Monday showed.

The BOP position stood at a $1.966-billion deficit in March, a reversal of the $3.086-billion surplus in February and the $1.173-billion in March 2024.

The payments position takes into account Philippine transactions with the rest of the world during a specific period. A surplus means more funds entered the country, while a deficit means more funds exited.

“The BOP deficit reflected the national government’s drawdowns on its foreign currency deposits with the Bangko Sentral ng Pilipinas to meet its external debt obligations, as well as the BSP’s net foreign exchange operations,” the central bank said.

This brought the year-to-date payments position to a $2.958-billion deficit, which compares with the $238-million surplus in the first quarter of 2024.

“Based on preliminary data, the year-to-date deficit reflected mainly the widening trade in goods deficit. This decline was partly muted, however, by the net inflows from personal remittances, foreign direct investments, and foreign borrowings by the national government,” the BSP said.

The central bank has yet to release remittance figures for March, but reported a 2.7% year-on-year increase in funds sent by overseas Filipinos in February to $2.716 billion.

The BOP position mirrored the decrease in the final gross international reserves (GIR) to $106.7 billion in the first quarter of the year, down from $107.4 billion as of end-February.

“The latest GIR level provides a robust external liquidity buffer,” the BSP said, equivalent to 7.4 months’ worth of imports of goods and payments of services and primary income, and approximately 3.6 times the country’s short-term external debt based on residual maturity. — BM, GMA Integrated News