The Philippines posted a balance of payments (BoP) deficit of US$167 million (P9.5 billion) in July 2025, reversing the US$62 million (P3.5 billion) surplus recorded in the same month last year, the Bangko Sentral ng Pilipinas (BSP) reported.

The central bank attributed the shortfall to the national government’s drawdowns on its foreign currency deposits with the BSP to meet external debt obligations.

From January to July 2025, the country’s cumulative BoP position stood at a US$5.8 billion (P330.4 billion) deficit, a sharp turnaround from the US$1.5 billion (P85.4 billion) surplus during the same period in 2024.

BSP said preliminary data showed that the wider trade in goods deficit continued to weigh heavily on the country’s external accounts. However, the negative impact was partly offset by steady remittance inflows from overseas Filipinos, foreign borrowings by the national government, and net inflows of foreign portfolio investments.

The July BoP deficit also mirrored the decline in the Philippines’ gross international reserves (GIR), which fell to US$105.4 billion (P6.01 trillion) at end-July from US$106.0 billion (P6.07 trillion) a month earlier.

Despite the drop, BSP stressed that the GIR remains a sufficient external liquidity buffer. The reserves are still equivalent to 7.2 months’ worth of imports and payments of services and primary income, and cover about 3.4 times the country’s short-term external debt based on residual maturity.

GIR assets consist of foreign securities, foreign exchange, gold holdings, and other reserve assets that help the country manage its foreign obligations, stabilize the peso, and shield the economy from global financial shocks.