BOP deficit widens to $2.7 billion as GIRs continue to rise

The Philippines’ balance of payments (BOP) recorded a deficit of $2.3 billion in February 2026, bringing the cumulative shortfall for the first two months of the year to $2.7 billion, according to data from the Bangko Sentral ng Pilipinas (BSP).

The latest figure follows January’s much narrower $373 million deficit, when improved foreign exchange inflows helped temper external imbalances, based on earlier BSP data. This represents a month-on-month increase of about $1.93 billion.

The BOP reflects the country’s transactions with the rest of the world and serves as a key indicator of its external position. Preliminary BSP data showed that the February deficit largely stemmed from the National Government’s foreign currency withdrawals and payments for external obligations, as well as sustained demand for foreign exchange to support import requirements.

Despite the deficit, the country’s gross international reserves (GIR) rose to a new record high of $113.3 billion as of end-February 2026, up from $112.7 billion in the previous month.

At this level, the GIR provides an adequate external liquidity buffer, equivalent to 7.5 months’ worth of imports of goods and payments of services and primary income, according to the BSP.

The reserves also cover about 4.3 times the country’s short-term external debt based on residual maturity.

The BSP may draw on its GIR to cushion external shocks or address excessive volatility in the local currency, which has experienced sharp swings over the past two months, largely due to the crisis in the Middle East.

Surging oil prices and heightened demand for the US dollar—amid the US-backed invasion of Iran—pushed the peso past the P60-per-dollar level on Thursday. The currency closed at P60.10, after hitting an intraday low of P60.40.

The BSP earlier issued a statement in response to the peso’s continued depreciation and the inflationary pressures stemming from elevated fuel prices linked to the Middle East conflict.

“On the peso, the BSP stresses that it operates in the foreign exchange market to smooth excess volatility and maintain orderly conditions. This is consistent with a flexible exchange rate policy, with intervention limited to tempering large swings that could affect inflation rather than defending any specific level,” it said.