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The Philippines’ balance of payments (BOP) deficit in 2025 settled below the central bank’s full-year forecast despite posting a wider deficit in December.

Data from the Bangko Sentral ng Pilipinas (BSP) showed that the country’s BOP position swung to a USD 5.661-billion deficit, a reversal from the USD 609-million surplus seen in 2024.

This was narrower than the central bank’s projection of a USD 6.2-billion gap or -1.3% of the country’s gross domestic product (GDP).

In December alone, the BOP deficit narrowed year on year to USD 827 million from a USD 1.508-billion gap.

However, it widened from the USD 225-million shortfall recorded in November.

“The Philippines’ balance of payments registered an USD 827-million deficit in December 2025, bringing the full‑year outcome to a USD 5.7-billion deficit,” the BSP said in a statement late on Monday.

BOP refers to the country’s economic transactions with other nations. A surplus indicates more funds entered the country, while a deficit shows that the country spent more than it received.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the BOP deficit in December was partly due to the country’s continued trade deficit.

The Philippines’ trade-in-goods balance, or the difference between the values of exports and imports, narrowed to a USD 45.2-billion gap as of end-November from USD 50.18 billion in the same period in 2024.

Meanwhile, John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said subdued capital inflows and foreign direct investments, as well as sustained net outflows from portfolio investments, may have also fueled the recent BOP deficit.

“It reflects a mix of weaker capital inflows, softer FDI (foreign direct investment), and continued net outflows from portfolio investments, alongside a persistently wide trade deficit driven by imports,” he said in a Viber message.

“(The December) deficit likely reflects year-end debt servicing, profit repatriation, and portfolio rebalancing, which are typical toward the close of the year.”

FDI net inflows have recorded double-digit annual declines every month since August 2025. In October, it slumped by 39.8% to USD 642 million from USD 1.067 billion a year ago.

Mr. Ricafort said the country’s BOP position may improve in the near term if the administration’s governance reforms would materialize.

“For the coming months, BOP data would improve further if anti-corruption measures and other reform measures, especially in further leveling up the country’s governance standards, are taken seriously, just like 10-15 years ago, as these help further improve international investor confidence in the country,” he said in an e-mail.

Record dollar reserves

Meanwhile, the central bank’s dollar reserves stood at USD 110.833 billion as of end-2025, 4.31% higher than the USD 106.257 billion logged in the prior year.

This marked a new all-time high gross international reserves (GIR) level on an annual basis, breaking the previous record of USD 110.117 billion at end-2020.

The dollar reserves level in 2025 also exceeded the BSP’s estimate of USD 109 billion for the year.

At end-December, the country’s GIR level translated to 7.4 months’ worth of imports of goods and payments of services and primary income, well above the three-month standard.

“Specifically, the latest GIR level ensures the availability of foreign exchange to meet balance of payments financing needs, such as for payment of imports and debt service, in extreme cases when there are no export earnings or foreign loans,” the central bank said.

It is also enough to cover about 3.9 times the country’s short-term external debt based on residual maturity.

GIR comprises foreign-denominated securities, foreign exchange, and other assets such as gold. It enables a country to finance imports and foreign debts, maintain the stability of its currency, and safeguard itself against global economic disruptions.

For Mr. Rivera, a rebound in FDIs, export performance, remittance inflows, the US Federal Reserve’s monetary policy actions, among other global financial conditions, will determine the country’s BOP position this year.

“While near-term pressures from global uncertainty and PHP (Philippine peso) weakness may persist, a pickup in investments and exports could help narrow the deficit this year, with GIR expected to remain broadly stable barring major external shocks,” he said.

For 2026, the BSP expects the overall BOP position to end at a USD 5.9-billion deficit or -1.2% of the Philippine GDP. Meanwhile, it sees the GIR level reaching USD 110 billion by yearend. — Katherine K. Chan, Reporter

 

 

The Philippines’ agricultural production is estimated to have grown modestly in 2025 as gains in poultry and crop output likely offset the decline in livestock and fisheries, analysts said.

Former Agriculture Secretary William D. Dar told BusinessWorld that he estimated agriculture output to have expanded by about 2% in 2025.

If this projection is realized, it will be a reversal from the 2.2% decline in farm output recorded in 2024.

The Philippine Statistics Authority (PSA) reported an agricultural output of PHP 1.72 trillion in 2024, down from PHP 1.76 trillion a year earlier. 

“Overall, for the 2025 performance of the agriculture sector, there is potentially an increase in output year on year. The crops and poultry subsector will have positive growth as compared to the negative growth of livestock and fisheries,” Mr. Dar said in a Viber message.

Former Agriculture Undersecretary Fermin D. Adriano said a higher full-year output in 2025 can be attributed to relatively better weather conditions.

“My sense is that agriculture performed better in 2025 compared to 2024, which saw a series of devastating typhoons and flooding,” he told BusinessWorld via Viber.

Meanwhile, Raul Q. Montemayor, national manager of the Federation of Free Farmers, said agriculture output is likely lower or flat in the fourth quarter of 2025.

According to PSA data, agricultural output in the fourth quarter of 2024 fell 1.95% to PHP 484.59 million from PHP 494.25 million a year earlier.

“I think it will basically be the same story — lower or stagnant output, with only the poultry sector as the bright spot. I think palay (unmilled rice) and corn will be down,” he told BusinessWorld via Viber.

Mr. Montemayor said the low farmgate prices of palay and corn last year likely discouraged farmers, leading to a reduced crop output.

Palay and corn account for about 27% of the Philippines’ total crop output.

Data from the PSA showed that palay production in the fourth quarter of 2025 fell by 5.21% to 6.85 million metric tons (MMT) from 7.23 MMT a year earlier.

Poultry growth

For both fourth-quarter and annual output, analysts project a strong turnout for the poultry sub-sector and declines in livestock and fisheries output.

Elias Jose M. Inciong, chairman of the United Broiler Raisers Association, told BusinessWorld that poultry output likely grew in the fourth quarter of 2025 from a year earlier.

“The reason would probably be an influx of new entrants to the industry,” he said in a Viber message.

For the livestock subsector, the African Swine Fever (ASF), a highly contagious viral disease lethal to swine and wild boars, likely continued to weigh down on production.

“ASF continues to be a problem not only in terms of casualties but also hesitance of hog raisers to repopulate because of the risk,” Mr. Montemayor said.

Meanwhile, Norberto O. Chingcuanco, a board member of the National Fisheries Research and Development Institute and co-convenor of Tugon Kabuhayan, said weather disruptions in the fourth quarter heavily affected fishery production.

“It was a good increase till Typhoon Uwan (international name: Fung-wong) hit us. A huge volume of fish escaped from sea cages,” he told BusinessWorld via Facebook Messenger in mixed English and Filipino

Data from the Department of Agriculture showed that Typhoon Uwan caused PHP 83.66 million in damage to fisheries, with almost 21,000 metric tons of fishery commodities reported lost.

However, Mr. Chingcuanco said fishery output did not actually disappear or decline in terms of its contribution to national food security. Many of the fish that escaped from sea cages were later caught as community catch, which official statistics cannot track.

The PSA will release the 2025 fourth-quarter and full-year agriculture output data on Jan. 28, a day before the release of fourth-quarter and full-year preliminary gross domestic product (GDP) data on Jan. 29.

Agriculture output contributes about a tenth to GDP and a fourth of the country’s jobs. — Vonn Andrei E. Villamiel

The Philippine economy may expand slower until next year as global uncertainties and the local corruption controversy continue to drag growth, the International Monetary Fund (IMF) said.   

In its latest World Economic Outlook (WEO) released on Monday, the IMF said it expects Philippine gross domestic product (GDP) to grow by 5.6% this year, within the government’s 5%-6% goal.

This is the same projection given following its Article IV Consultation with the country last December, but slightly lower than its 5.7% estimate in the previous WEO.

At the same time, the IMF cut its Philippine GDP growth forecast for 2027 to 5.8% from its 6% projection in October. This also falls within the government’s 5.5%-6.5% target.

“The downward revision in GDP growth projections for 2026 and 2027 reflects the carryover impact from a downward revision in the IMF’s growth forecast for 2025 — from 5.4% to 5.1% — and a slower pace of capital accumulation,” an IMF spokesperson said in an e-mail.

For 2025, the multilateral lender expected Philippine GDP to grow by 5.1%, unchanged from December forecast. However, this is below its 5.4% forecast given in October.

This came after the flood control corruption mess led to slower economic growth and government spending. In the third quarter, GDP grew by 4% — the weakest growth in over four years. This brought year-to-date GDP growth to 5%.

The IMF said that climate shocks in the latter half of the year also contributed to the economic slowdown.

“The downward revision for 2025 in turn reflects a sharper-than-expected slowdown in Q3 amid recent corruption allegations and climate shocks impacting economic activity in the second half of the year,” it said.

In 2025, the Philippines encountered 23 tropical cyclones, affecting millions of Filipinos and leaving billions of pesos in damages nationwide, according to data from the state weather bureau.

The IMF earlier said that weather disruptions have trimmed the country’s GDP by 0.2%-0.3% yearly and accelerated inflation by up to 0.6 percentage point annually.

The multilateral lender said that lingering uncertainty over tighter trade restrictions, geopolitical tensions, and disruptive financial market corrections could dampen the country’s economic growth.

“On the upside, accelerated implementation of structural and governance reforms can boost investment and FDI (foreign direct investment), increase fiscal multipliers and boost potential growth,” it added.

Meanwhile, the IMF forecasts 6% GDP growth for the Philippines in 2028, at the low end of the government’s 6%-7% target.

“Economic growth will be driven by robust consumption and higher investment, supported by monetary policy easing and the authorities’ recent policy initiatives to support private investment,” the IMF said.

The Bangko Sentral ng Pilipinas (BSP) has been on an easing path since August 2024, having delivered a total of 200 basis points (bps) in cuts.

In October and December last year, it slashed the key policy rate by 25 bps each in a move to spur domestic demand amid waning consumer and investor sentiment due to the flood control mess.

The benchmark interest rate now stands at an over three-year low of 4.5%, which the central bank said is already close to their ideal rate, signaling an end to its current easing cycle.

BSP Governor Eli M. Remolona, Jr. has left the door open to another 25-bp cut at their Feb. 19 review but said that further easing may be unlikely considering current economic data.

Still, he noted that a weaker-than-expected growth may prompt them to deliver two rate cuts this year to help stimulate the economy. — Katherine K. Chan

The Philippines’ debt service on foreign loans went down by about 23% year on year at end-October as principal and interest payments fell, the Bangko Sentral ng Pilipinas (BSP) reported.

Based on preliminary central bank data, the foreign debt service bill declined by 22.94% to USD 11.02 billion in the 10-month period from USD 14.3 billion a year ago.

October marked the fifth straight month that the country’s external debt service burden fell on an annual basis.

This came as principal payments plunged by an annual 41.04% to USD 4.513 billion at end-October from USD 7.654 billion a year ago.

Meanwhile, interest payments stood at USD 6.507 billion at end-October, slipping by 2.09% from USD 6.646 billion in the previous year.

“(This was) largely due to lower foreign debt maturities, as well as reduced share of foreign borrowings in the National Government’s (NG) borrowing mix in the total borrowing mix in recent years to better manage forex (foreign exchange) risks entailed in external borrowings,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

In 2025, the NG sought to borrow 81% or P2.11 trillion of its P2.6-trillion financing from local lenders. It previously observed a 75:25 borrowing mix in 2024 in favor of domestic creditors.

The debt service bill represents principal and interest payments after rescheduling, according to the BSP.

This includes principal and interest payments on fixed medium- and long-term credits, including International Monetary Fund credits, loans covered by the Paris Club and commercial bank rescheduling, and New Money Facilities.

It also covers interest payments on fixed and revolving short-term liabilities of banks and nonbanks.

However, the debt service data exclude prepayments on future years’ maturities of foreign loans and principal payments on fixed and revolving short-term liabilities of banks and nonbanks.

At end-October, the external debt service burden as a share of gross domestic product (GDP) stood at 2.9%, lower than the 3.9% from the previous year.

“We’re seeing the external debt service burden ease because borrowers — both public and private — managed to refinance more smartly as global rates stabilized, reducing the amount of high‑cost foreign obligations falling due this year,” Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said via Viber.

Mr. Ricafort also noted that the US Federal Reserve’s recent rate cuts lowered interest payments on foreign debts.

The Fed has so far lowered key borrowing costs by 175 basis points since September 2024, bringing its policy rate to the 3.5%-3.75% range.

BSP data also showed that the country’s outstanding external debt rose to its highest yet at USD 149.093 billion as of September, up by 6.77% from USD 139.643 billion a year ago.

This topped the previous record of USD 148.873 billion seen in the second quarter.

As of end-September, the external debt-to-GDP ratio came in at 30.9% from 30.6% in the comparable year-ago period.

The BSP’s external debt data cover borrowings of Philippine residents from nonresident creditors, regardless of sector, maturity, creditor type, debt instruments or currency denomination.

The central bank gathers data on external debt through reports submitted by borrowers, banks, and major foreign creditors.

“Going forward, risk of forex losses would still lead to a tempered approach in increasing foreign borrowings to finance the budget deficit,” Mr. Ricafort said.

“Continued or wider budget deficits would lead to higher programmed foreign commercial borrowings of the National Government, as signaled a few weeks ago,” he added.

The National Government’s budget deficit fell by 26.02% year on year in November to PHP 157.6 billion, reversing from the PHP 11.2-billion surplus in October, according to Treasury data.

In the 11-month period, the fiscal deficit widened to PHP 1.26 trillion from PHP 1.18 billion a year ago.

Meanwhile, Mr. Ravelas said debt servicing on external borrowings may continue to decline until yearend due to elevated base effects from 2024 and smoother maturity schedule last year.

“Given the high base (in 2024) and the smoother maturity schedule (in 2025), the year‑on‑year decline will likely continue in the last two months unless there’s a sudden spike in global rates or a sharp peso slide,” he said. “For now, the trend points to improving the breathing room on the external front.” — Katherine K. Chan, Reporter

The Philippines has made its first major natural gas discovery in more than a decade, a development that could strengthen domestic energy supply and support rising power demand, President Ferdinand R. Marcos, Jr. said on Monday.

The reservoir, called Malampaya East-1, lies about 5 kilometers east of the existing Malampaya gas field off Palawan province

“This additional resource can help support the government’s efforts for the stabilization of our power supply,” Mr. Marcos said in a video posted on his Facebook page.

The field is estimated to hold about 98 billion cubic feet of gas in place. This is equivalent to roughly 14 billion kilowatt-hours of electricity a year, enough to supply about 5.7 million households annually.

The discovery is expected to extend Malampaya’s role in the country’s energy mix and reinforce domestic gas supply in the coming years.

Initial tests showed the well flowing at about 60 million cubic feet of gas per day, a level Mr. Marcos said is comparable to the original Malampaya wells and indicates strong productivity.

The find also includes condensate, a high-value liquid fuel that could further support efforts to stabilize electricity supply. — Chloe Mari A. Hufana