By Katherine K. Chan, Reporter
THE PHILIPPINES’ balance of payments (BoP) gap ballooned to over $3 billion in September as more dollars exited the economy amid heightened global uncertainty, Bangko Sentral ng Pilipinas (BSP) data showed.
Based on central bank data released on Monday, the country posted a $3.144-billion deficit in September, significantly wider than the $596-million gap recorded in August.
This marked the third month in a row that the BoP position settled at a deficit, marking the largest monthly shortfall in nearly two years or since the $4.078 billion in January 2025.
The September figure was also a reversal of the $82-million surplus seen a year ago.
“The $3.14-billion BoP deficit in September was likely driven by a wider trade gap, higher import and debt-service payments, and softer capital flows amid persistent global uncertainty,” Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said via Viber.
SM Investments Corp. Group Economist Robert Dan J. Roces noted that the widening BoP deficit indicates that more dollars flowed out of the country than what flowed in.
“The challenge is not simply to preserve reserves, but to strengthen the dollar inflows that replenish them,” he added in a Viber message.
BoP refers to the country’s economic transactions with other nations. A deficit shows that the country spent more than it received, while a surplus indicates more funds entered the country.
In the nine-month period, the Philippines’ BoP deficit sharply widened year on year to $9.087 billion from $5.315 billion.
“The year-to-date BoP position reflected the continued trade in goods deficit and net outflows from foreign portfolio investments,” the BSP said in a statement.
“These were partly offset by the sustained net inflows from personal remittances of overseas Filipinos, foreign borrowings by the NG (National Government), trade in services, and foreign direct investments,” it added.
For Mr. Asuncion, the latest BoP data raise concerns that the deficit could blow past the BSP’s full-year forecast, but noted that structural dollar inflows remain a bright spot for the country’s external position.
“With the year-to-date deficit already reaching $9.09 billion, the likelihood of posting a full-year surplus is now extremely low, and the focus has shifted to whether the final deficit could exceed official projections,” he said.
“That said, we do not view the latest outturn as a sign of fundamental external sector weakness, as structural foreign exchange inflows from remittances, BPO (business process outsourcing) revenues, and tourism continue to provide support to the country’s external position,” he added.
Earlier this month, the central bank noted that tighter global economic conditions amid ongoing geopolitical woes will continue to strain the country’s external position until next year.
It now projects the country’s BoP position to end at a $9.2-billion deficit or -1.8% of gross domestic product (GDP) this year.
This is narrower than its earlier estimate of a $10.7-billion gap or -2.1% of GDP, but wider than the $5.7-billion shortfall or -1.2% of GDP recorded in 2025.
INTERNATIONAL RESERVES
Revised BSP data also showed that its gross international reserves (GIR) stood at $99.494 billion as of September, the lowest in three years or since the $98.116 billion logged in September 2023.
This was down by 8.78% from the $109.06-billion dollar reserves it held a year earlier and by 5.1% from $104.846 billion in the previous month.
It was likewise lower than its preliminary GIR tally of $99.997 billion reported earlier this month.
The GIR has declined annually for seven straight months or since the first full month of the Middle East war in March.
“The decline in gross international reserves is not yet a question of reserve adequacy, but of how long external pressures will persist. At $99.5 billion, the country still has a comfortable buffer,” Mr. Roces noted.
According to the BSP, its dollar reserves fell below $100 billion due to its net foreign exchange operations after the peso weakened in September.
The peso breached the P62-a-dollar handle for the first time in September, plummeting by as much as P62.86 on Sept. 14 to average P62.6125 per dollar during the month.
As of end-September, the peso has slumped by P3.85 or 6.15% from its P58.79 finish on Dec. 29, 2025.
The BSP also attributed the GIR decline to downward valuation adjustments due to price swings in its gold holdings and foreign currency-denominated reserve assets.
It also fell after the NG reduced its foreign currency deposits with the BSP to pay its external debts, with its total withdrawals also exceeding its deposits during the month.
GIR are the central bank’s foreign assets held mostly as investments in foreign-issued securities, foreign exchange and monetary gold, among others.
These are supplemented by claims to the International Monetary Fund in the form of reserve position in the fund and special drawing rights.
“The latest GIR level provides sufficient foreign currency to meet the country’s import needs, service its external debt obligations, and serve as a buffer against external economic shocks,” the BSP said.
At end-September, the country’s GIR level translated to 6.2 months’ worth of imports of goods and payments of services and primary income, more than double the three-month standard.
It could also cover about 3.1 times the country’s short-term external debt based on residual maturity.
The BSP sees its dollar reserves shrinking to $104 billion in 2026 from $110.8 billion last year.