BoP surplus widens to USD 359 million

The Philippines’ balance of payments (BoP) surplus ballooned to USD 359 million in August, reflecting gains in the central bank’s net income from overseas investments, the Bangko Sentral ng Pilipinas (BSP) said.

Preliminary data from the BSP showed the BoP surplus stood at USD 359 million in August, widening from USD 88 million in the same month last year.

Month on month, the BoP position swung to a surplus from the USD 167-million deficit recorded in July.

“The BoP surplus reflected the Bangko Sentral ng Pilipinas’ net income from its investments abroad,” the central bank said in a statement.

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.

In the January-to-August period, the country’s BoP position swung to a USD 5.397-billion deficit, a reversal from the USD 1.592-billion surplus in 2024.

“Preliminary data indicate that the year-to-date BoP deficit was largely due to the continued trade in goods deficit,” the BSP said.

The Philippines’ trade-in-goods balance, or the difference between the values of exports and imports, narrowed to USD 28.46 billion in the January-to-July period, from USD 29.93 billion a year ago.

“This was partly offset by the sustained net inflows from personal remittances from overseas Filipinos, foreign borrowings by the National Government, foreign direct and portfolio investments, and trade in services,” the BSP said.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in an e-mail that the latest BoP position partly reflects the central bank’s investment gains from abroad.

“(This was) offset by the continued Trump risk factor or premium that led to some market volatility worldwide in view of the Aug. 7, 2025 extended deadline for US trade deals and tariffs,” he added.

US President Donald J. Trump’s higher tariffs on imports from dozens of countries, including the Philippines, took effect on Aug. 7.

The US imposed a 19% tariff on Philippines goods.

Mr. Ricafort said the August BoP position also came as the government paid off external debts and increased volatility in the local foreign exchange market.

In August, the peso performed weaker at an average P57.2525 per US dollar from the P56.7523 recorded in July.

The BSP expects the overall BoP position to end at a USD 6.3-billion deficit or -1.3% of gross domestic product (GDP) this year and a USD 2.8-billion deficit or -0.5% of GDP in 2026.

DOLLAR RESERVES

Meanwhile, the BSP said the BoP position mirrored the rise in gross international reserves (GIR) to USD 107.1 billion as of end-August from USD 105.4 billion as of end-July.

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

The central bank said the level of dollar reserves as of end-August “remains an adequate liquidity buffer,” equivalent to 7.2 months’ worth of imports of goods and payments of services and primary income, more than double the three-month standard.

It is also enough to cover about 3.7 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.

The central bank expects GIR to settle at USD 104 billion by end-2025 and USD 105 billion in 2026. — Katherine K. Chan