BoP deficit narrows 33% to $3.9 billion
The BSP said this was supported by a net reduction in resident banks’ loan claims on nonresidents, along with higher foreign loan availments by domestic banks and other sectors.
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The BSP said this was supported by a net reduction in resident banks’ loan claims on nonresidents, along with higher foreign loan availments by domestic banks and other sectors.
Share
The Philippines’ balance of payments (BoP) deficit contracted by 33 percent in the first half of 2026 as stronger financial account inflows partly offset a wider current account deficit, according to the Bangko Sentral ng Pilipinas (BSP).
The country posted a BoP deficit of $3.9 billion from January to June, equivalent to 1.6 percent of gross domestic product. This was lower than the $5.6 billion deficit, or 2.4 percent of GDP, recorded in the same period last year.
The improvement was driven mainly by stronger net inflows in the other investment account. The BSP said this was supported by a net reduction in resident banks’ loan claims on nonresidents, along with higher foreign loan availments by domestic banks and other sectors.
Direct investments also recorded net inflows, although at a lower level. Stronger equity capital investments and higher repayments of intercompany loans by foreign affiliates partly offset weaker foreign direct investment. Net FDI eased as nonresidents reduced their investments in debt instruments amid continued global uncertainties.
At the same time, the current account deficit widened to $15.4 billion in the first half from $10.2 billion a year earlier, mainly because of a larger trade-in-goods deficit.
Merchandise exports rose 4.9 percent to $84.6 billion, supported by higher shipments of electronic products, gold, and machinery and transport equipment. However, imports grew faster, increasing 10.1 percent to $100 billion.
The higher import bill was concentrated in telecommunications equipment, electrical machinery, manufacturing inputs and fuel products, which supported domestic investment, production and energy requirements. Elevated global energy prices linked to geopolitical developments in the Middle East also increased import payments.
The wider goods deficit was partly offset by surpluses in services, primary income and secondary income.
