BOP surplus narrows as investor jitters rise

The Philippines’ Balance of Payments (BOP) — which tracks all economic transactions between Filipinos and the rest of the world over a given period — posted a $225-million surplus in November 2025, down $48 million from October, according to data released by the Bangko Sentral ng Pilipinas (BSP).

Despite the month-on-month decline, the figure marks a sharp year-on-year improvement from the $2.3-billion deficit recorded in November 2024.

The BOP measures the movement of money, goods, services, and financial assets — including international trade and foreign direct investments (FDIs). A surplus indicates that more funds are entering the economy than leaving it, typically driven by strong exports, capital inflows, or robust remittances.

The narrower surplus may point to rising foreign investor caution amid developments related to the flood control scandal. While the country still recorded net inflows in November, heightened political uncertainty — including a series of video exposés by fugitive former congressman Zaldy Co implicating President Ferdinand R. Marcos Jr. as the alleged mastermind behind flood control budget insertions — may have contributed to increased investor anxiety.

Central bank indicators reflect this cautious sentiment. The BSP’s Business Expectations Survey (BES) showed the business confidence index (CI) fell to a three-year low of 23.2 percent in the third quarter of 2025.

In response to weakening sentiment, the central bank recently cut its key policy rate by another 25 basis points to help stimulate economic activity heading into 2026. While the move has led to marginal improvements in outlook, confidence remains subdued amid ongoing corruption allegations against the Marcos administration. The BSP reported that the CI for the first quarter of 2026 settled at 23.7 percent, down sharply from 49.5 percent in the previous survey.

“The lingering effects of the recent natural calamities, together with the negative impact of corruption allegations on investor and business sentiment, were cited as reasons that weighed down the outlook for the upcoming periods,” the central bank said.

For the first 11 months of 2025, the BOP recorded a cumulative $4.8-billion deficit, about $500 million wider than the deficit posted from January to October, indicating continued net outflows from the economy.

The Philippines previously recorded BOP surpluses in 2023 and 2024.