Philippines’ current account gap narrows to USD 16.3B in 2025

Strong exports growth and remittance inflows led the Philippines’ current account deficit to narrow at end-2025, the Bangko Sentral ng Pilipinas (BSP) reported.

Central bank data showed that the country’s current account posted a USD 16.291-billion gap last year, 12.3% narrower than the USD 18.565-billion deficit seen in 2024.

This was equivalent to -3.3% of Philippine gross domestic product (GDP).

However, the year-end balance was wider than the BSP’s projected USD 15.5-billion deficit or -3.2% of GDP for the year.

In the fourth quarter alone, the country’s current account deficit narrowed by 49.5% to USD 2.471 billion (-1.8% of GDP) from USD 4.894 billion (-3.8% of GDP) in the same year-ago period.

“This was supported by an improved trade-in-goods balance on the back of robust export growth as well as higher income receipts from overseas Filipinos, consistent with record full-year cash remittances in 2025,” the BSP said in a statement released late on Friday.

Preliminary data from the Philippine Statistics Authority showed that the country’s trade gap stood at a four-year low of USD 49.17 billion last year, down 9.5% from the USD 54.33-billion deficit in 2024.

This came as goods exports grew by 15.2% to USD 84.41 billion, well above the BSP’s projected 9% growth to USD 60 billion.

In the October-to-December period, the country’s trade in goods balance posted a USD 16.1-billion deficit, narrowing by 14% from the USD 18.7-billion gap seen in the fourth quarter of 2024, “as export growth substantially outpaced the modest uptick in imports.”

Exports rose by 23.8% to USD 15.8 billion from USD 12.8 billion a year earlier due to increased shipments of electronic products, machinery and transport equipment, BSP data showed.

Meanwhile, goods imports stood at USD 31.9 billion, up 1.3% year on year from USD 31.5 billion.

“The uptick was driven primarily by higher outlays for telecommunication equipment and electrical machinery, consistent with ongoing upgrades in the country’s information and communications technology infrastructure,” the central bank said.

The central bank also noted that remittances boosted household consumption last year, which helped cushion the current account against external pressures.

In 2025, remittances from Filipinos abroad climbed by 3.3% year on year to hit a record high of USD 35.634 billion from USD 34.493 billion in 2024, according to separate BSP data.

“At the same time, the business process outsourcing (BPO) sector remained a reliable source of services export earnings, with sustained industry expansion and firm global demand for digital and outsourcing services helping offset softer receipts in other services segments during the year,” the BSP added.

Higher receipts from BPOs brought the net trade-in-services up by 2% to USD 4.1 billion in the fourth quarter from USD 4 billion a year ago.

On the other hand, net receipts in primary income plunged by an annual 46.5% to USD 765 million in the fourth quarter from USD 1.4 billion previously, while net receipts in the secondary income account were up 4.5% to USD 8.8 billion from USD 8.4 billion.

The current account measures the country’s trade in goods and services, as well as primary and secondary income.

Primary income refers to flows of labor and financial resources between resident and nonresident institutional units, while secondary income accounts for transfers between the country and abroad, such as remittances from overseas Filipino workers.

For 2026, the central bank expects the current account deficit to narrow to USD 15.3 billion or -3% of GDP. — Katherine K. Chan