In April, the country’s international financial transactions led to a wider deficit of $2.6 billion. The national government fulfilled several external debts, and the costs of imported goods and services exceeded export income.

The Bangko Sentral ng Pilipinas reported on Monday that the April overall balance of payments (BoP) level was higher than the $639 million deficit recorded in April 2024.

The new figure was also higher than the $2-billion BoP deficit in March this year, marking the fourth time the country registered a deficit in the first four months of the year.

According to the Philippine Statistics Authority, the country’s trade deficit worsened to $12.7 billion from January to March, rising from the $11.3 billion deficit posted in the same months in 2024.

Meanwhile, external debt in March only slightly declined by 1.92 percent to P5.3 trillion year-on-year due to a stronger peso against the US dollar.

Lower GIR reflected

The BoP deficit in April also reflected the country’s lower gross international reserves, which were $105.3 billion compared to $106.7 billion in March.

The reserves, however, remained more than adequate to cover 7.3 months’ worth of imports of goods and payments of services and primary income.

Given the April data, the BOP deficit in the first four months reached $5.5 billion, up from the $401 million posted in the same period last year.

HSBC economist for Southeast Asia Aris Dacanay, said on Monday that the Philippines’ semiconductor exports could grow as foreign firms expand manufacturing outside the United States and China amid Trump’s tariffs.

Chip exports take bulk

More than 50 percent of Philippine exports are electronics, with 75 percent of these items consisting of semiconductors.

“Though currently paused, we think low reciprocal tariffs from the US and amicable Philippine-US relations offer global investors a potential opportunity to diversify,” he said.

“A case in point is that Samsung decided to invest $1 billion in the Philippines earlier this year to build a new manufacturing facility,” Dacanay continued.

However, he said faster development of energy infrastructure and workforce upskilling will boost foreign investments in the Philippines and its government revenues.

“Semiconductor production is an energy-intensive industry. And among most of Asia, electricity rates in the Philippines are only cheaper than in two countries, Singapore and Japan,” Dacanay said.

However, he added that a stronger peso might make Philippine exports less competitive as other businesses explore other suppliers for cheaper prices.

Nevertheless, Dacanay cautioned that the government must closely monitor Trump’s tariffs and continue to reform policies on diversifying exported goods and services.

“The 90-day tariff pause will end soon, but the outcome of it remains uncertain,” he said.