Philippines' BoP surplus widens to USD 3.4B in June

The Philippines' balance of payments (BoP) surplus widened to over USD 3 billion in June, which helped significantly narrow the BoP deficit in the first half of the year, central bank data showed.

Based on Bangko Sentral ng Pilipinas (BSP) data released late on Monday, the country’s BoP position remained at a surfeit for two straight months with USD 3.403 billion in June.

This is the largest monthly BoP surplus in nearly two years or since the USD 3.526 billion in September 2024.

It is also wider than the USD 226-million surplus a year ago and the USD 131-million surplus in May.

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

“June’s surplus likely came from a mix of seasonal dollar inflows, government external financing, and valuation gains. It’s a positive signal, but not yet a trend,” SM Investments Corp. Group Economist Robert Dan J. Roces said in a Viber message.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the widening surplus was largely driven by the proceeds from the USD 2.5 billion the government raised from its latest triple-tranche dollar bond offering.

Last month, the Treasury said it sold USD 550 million of the five-and-a-half year bonds, USD 1.65 billion of the 10-year bonds, and raised USD 300 million from the existing global bonds due in 2051.

June’s surplus brought the Philippines’ BoP deficit to USD 3.877 billion in the first half of the year, narrower than the USD 7.28-billion gap as of May and the USD 5.588-billion deficit in the same period last year.

The central bank said the country’s year-to-date BoP position remained at a deficit as it continued to post a trade-in-goods gap and hot money net outflows.

The Philippines has had a monthly trade-in-goods deficit for over a decade, with latest data showing the gap widened by 50.5% year on year to USD 5.48 billion in May from USD 3.64 billion.

Meanwhile, the latest BSP data showed the country’s foreign portfolio investments, also known as hot money, reversed to a USD 4.17-billion net outflow as of May from the USD 1.52-billion net inflow seen a year earlier.

However, the BSP noted that this was slightly tempered by the “sustained net inflows from personal remittances of overseas Filipinos, foreign borrowings by the NG (National Government), trade in services, and foreign direct investment.”

“The key is whether exports, remittances, tourism, and investment inflows continue to hold up, as those will determine how sustainable the external position is,” Mr. Roces said.

The central bank has noted that trade imbalances and tighter financial conditions will continue to strain the country’s external position until next year.

It expects the BoP deficit to widen to USD 10.7 billion or -2.1% of gross domestic product (GDP) by end-2026 from USD 5.7 billion or -1.2% of GDP last year.

Three-month high GIR 

On the other hand, the Philippines’ gross international reserves (GIR) reached USD 104.745 billion in the first half of 2026, according to revised BSP data.

This marks the highest dollar reserves held by the central bank in three months or since USD 106.636 billion as of the first quarter.

The latest GIR level edged up by 0.73% from the USD 103.988 billion as of May but fell annually for a third consecutive month by 1.18% from USD 105.998 billion in the previous year.

The increase was driven by the NG’s net foreign currency deposits with the central bank and the BSP’s net earnings from its foreign investments.

However, the BSP also noted that these were tempered by “downward valuation adjustments, primarily driven by changes in prices of the BSP’s gold holdings and foreign currency-denominated reserve assets, and NG’s drawdowns on its foreign currency deposits with the BSP for external debt service.”

Dollar reserves are the central bank’s foreign assets held mostly as investments in foreign-issued securities, foreign exchange, and monetary gold, among others.

These are supplemented by claims to the International Monetary Fund (IMF) in the form of reserve position in the fund and special drawing rights (SDRs).

The central bank’s gold holdings jumped by 24.58% to USD 17.194 billion at end-June from USD 13.802 billion last year but dropped by 11.74% from USD 19.48 billion a month ago.

Meanwhile, the country’s reserve position in the IMF amounted to USD 724.6 million, down 1.06% from USD 732.4 million in the previous year but 1.46% higher than end-May’s USD 712.2 million.

SDRs — or the amount the Philippines can tap from the IMF’s reserve currency basket — also declined by 0.75% to USD 3.915 billion from USD 3.945 billion a year ago and by 0.93% from USD 3.951 billion in the prior month.

The central bank’s foreign currency and deposits plunged by 48.35% to USD 2.298 billion in the first half from USD 4.449 billion in the comparable year-ago period. However, it more than doubled (176.29%) from USD 831.7 million as of May.

BSP data also showed its securities were valued at USD 72.037 billion during the period, slipping by 5.73% from USD 76.413 billion last year and by 0.98% from USD 72.75 billion a month earlier.

On the other hand, its other reserves rose by 28.97% annually to USD 8.587 billion from USD 6.658 billion and by 37.13% month on month from USD 6.262 billion.

The BSP said the country’s end-June GIR level remains adequate, covering about 3.7 times the country’s short-term external debt based on residual maturity.

It also translates to 6.8 months’ worth of imports of goods and payments of services and primary income, still above the three-month standard.

“These provide sufficient foreign currency to meet the country’s import needs and service its external debt obligations and serve as a buffer against external economic shocks,” the central bank said.

GIR allows a country to finance imports and foreign debts, maintain the stability of its currency, and safeguard itself against global economic disruptions.

The BSP sees its foreign reserves settling at USD 104 billion this year, lower than the USD 110.8 billion it held in 2025. — Katherine K. Chan, Reporter