PH external reserves remain strong despite BOP deficit in January

The Philippines’ gross international reserves (GIR) remain robust despite the country posting a balance of payments (BOP) deficit of USD4.1 billion in January 2025, the Bangko Sentral ng Pilipinas (BSP) reported.

While the BOP deficit widened from USD740 million in January 2024, the BSP assured that the country’s external liquidity position remains stable. The central bank attributed the deficit to necessary drawdowns by the national government to settle external debt obligations and the BSP’s foreign exchange operations aimed at stabilizing the currency.

The GIR, which serves as a buffer against external shocks, stood at USD103.3 billion as of end-January 2025. Although lower than the USD106.3 billion recorded at the end of 2024, this level remains sufficient to cover 7.3 months’ worth of imports and is 3.7 times the country’s short-term external debt based on residual maturity.

A Resilient External Position

Despite short-term fluctuations, economic analysts point out that the Philippines continues to maintain a strong external position, backed by steady inflows from remittances, business process outsourcing (BPO) revenues, and foreign direct investments. The BSP remains confident that these inflows will help offset external pressures and support economic growth.

“The current BOP position reflects the country’s ongoing commitment to meeting international financial obligations while ensuring economic resilience,” the BSP said in a statement.

The government’s proactive management of foreign currency reserves, coupled with structural reforms to attract more investments, is expected to reinforce economic stability. Moving forward, the BSP will continue to monitor global financial conditions and implement measures to sustain a healthy external position.