The country’s balance of payments (BoP) position registered a $5.7-billion deficit in 2025, equivalent to 1.2 percent of gross domestic product (GDP), a reverse of the $609-million surplus recorded in 2024, the Bangko Sentral ng Pilipinas (BSP) said.

The BoP measures the country’s economic transactions with the rest of the world — including trade in goods and services, investments, loans and remittances, as well as foreign direct investments (FDIs), and serves as a key indicator of the economy’s external stability.

According to the BSP, the deficit largely reflected softer inflows in the financial account, which consists of FDIs and other investment and capital flows, amid tighter global financial conditions.

The 1.2-percent BoP deficit relative to GDP comes after the release of the country’s weak 2025 growth figures, which slowed to 4.4 percent amid persistent governance issues stemming from the infrastructure scandal.

Secretary Arsenio Balisacan of the Department of Economy, Planning and Development earlier said the country would have met its economic growth target in 2025 if not for the flood control corruption controversy.

“If public construction could have been flat, our GDP in 2025 would have actually increased from 4.4 percent to 5.5 percent. In other words, the sharp contraction of public construction because of the corruption scandal contributed to something like 1.1 percentage points [to the decline],” Balisacan said.

FDIs likewise fell to a five-year low in 2025 as governance concerns weighed on foreign investor sentiment.

The central bank said FDI net inflows reached $7.8 billion from January to December 2025 — a 17.1 percent decrease from the previous year and the lowest level since the height of the Covid-19 pandemic.

The BSP said net inflows weakened as residents increased investments in foreign-issued debt securities, while external loan availments by domestic banks and net inflows of foreign direct investments moderated during the year.

Despite this, the current account, which includes income from trade as well as remittances from overseas Filipino workers, improved, with the deficit narrowing to $16.3 billion, or 3.3 percent of GDP, in 2025 from $18.6 billion, or 4.0 percent of GDP, in 2024.

The improvement was supported by stronger export performance and continued inflows from overseas Filipinos.

The BSP said remittances remained a key stabilizing factor for the external sector, helping sustain household consumption and providing a steady source of foreign exchange.