BSP: PH reserves still strong despite May BOP deficit

The Philippines recorded a balance of payments (BOP) deficit in May 2025, but its gross international reserves (GIR) remain robust, according to preliminary data released by the Bangko Sentral ng Pilipinas (BSP).

In a statement on Thursday, the central bank reported a USD298 million BOP shortfall for the month. The deficit reflects the national government's foreign currency withdrawals to settle external debt obligations.

Despite the monthly dip, the BSP said the country’s GIR stood at USD105.2 billion in May—slightly down from April’s USD105.3 billion, yet still a strong external liquidity buffer.

“Despite the modest decline, the GIR level remains a strong external liquidity buffer, sufficient to cover 7.1 months' worth of imports of goods and payments of services and primary income,” the BSP noted.

It also covers 3.3 times the country’s short-term external debt based on residual maturity—well above international adequacy benchmarks.

From January to May 2025, the cumulative BOP deficit widened to USD5.8 billion, reversing a USD1.6 billion surplus during the same period last year. The shift is mainly attributed to the country’s persistent trade-in-goods deficit, which reached USD15.91 billion as of April.

Nonetheless, the central bank pointed to steady net inflows from overseas Filipinos' remittances, foreign borrowings, and portfolio investments as mitigating factors helping to stabilize the country’s external position.

The BOP, which summarizes the Philippines’ economic transactions with the rest of the world, is a key indicator of the country’s macroeconomic health and external resilience.