The Philippines’ balance of payments (BoP) — its record of transactions with the rest of the world — remained in deficit at the start of 2026, according to the latest data from the Bangko Sentral ng Pilipinas (BSP).The BoP tracks the flow of money, goods, services, and financial assets, including international trade and foreign direct investments (FDIs).The central bank reported on Thursday that the BoP registered a deficit of $373 million in January 2026 — a 55 percent decline from December’s level and significantly lower than the $4.078-billion deficit recorded in the same month last year.The January figure indicates a narrowing gap between outflows and inflows. However, the BoP remains in deficit, meaning more funds are leaving the economy than entering it, typically due to weaker exports, softer capital inflows, or lower remittances.The narrowing deficit correlates with the strong presence of foreign investors in local capital markets at the start of the year, with the Philippine Stock Exchange reporting that foreign investors accounted for 52 percent of transactions as of last week. This suggests improving foreign investor confidence following last year’s floodgate scandal, which dampened economic growth amid a sharp pullback in market sentiment.Latest central bank data showed that net foreign direct investment inflows reached $897 million in November 2025 — up roughly $255 million from the previous month, or about 28 percent.This marked the second consecutive monthly increase in FDI inflows, following October’s roughly 50 percent surge from September, further indicating improved foreign investor sentiment.Meanwhile, the BSP said gross international reserves (GIRs) remained adequate at $112.6 billion as of end-January 2026, equivalent to 7.5 months’ worth of imports of goods and payments of services and primary income. The central bank noted that this level covers about 4.1 times the country’s short-term external debt based on residual maturity.The current GIR level is the second highest on record, approximately $100 million below the September 2024 peak. Composed of foreign-denominated securities, foreign exchange, and other reserve assets including gold, GIRs help ensure sufficient dollar liquidity to meet import needs and foreign debt obligations, address currency volatility, and provide a buffer against external economic shocks.