BOP gap narrows in November

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December 22, 2025 | 12:00am

MANILA, Philippines — The country’s balance of payments (BOP) deficit narrowed in November compared to a year ago as seasonal inflows and easing import payments helped temper external pressures, even as cumulative figures remained in the red.

Data from the Bangko Sentral ng Pilipinas showed that the country recorded a BOP shortfall of $225 million in November, improving by 90 percent from the $2.28-billion deficit recorded in the same month last year.

The BOP gap marked the biggest in six months or since the $298-million shortfall recorded in May.

This brought the country’s cumulative BOP to a deficit of $4.83 billion from January to November, a reversal from the $2.12-billion surplus recorded in the same period last year.

The BOP measures the difference between total foreign currency inflows and outflows over a given period. A deficit indicates that more dollars left the country to pay for imports of goods, services and capital than what came in from exports, remittances from overseas Filipino workers, business process outsourcing revenues and tourism receipts.

Analysts said the November outcome largely reflected seasonal factors and short-term financial movements rather than a deterioration in the country’s external position.

Philippine Institute for Development Studies senior research fellow John Paolo Rivera said the November data reflected “seasonal pressures and capital flow volatility, including higher import demand ahead of the holidays, debt service payments and portfolio outflows amid global uncertainty and peso sensitivity to rate differentials.”

“While this snapped a short surplus streak, it does not signal a structural shift as remittances and services exports remain supportive,” Rivera said.

Prior to November, the country posted BOP surpluses for three consecutive months, helping narrow the cumulative deficit from $5.76 billion as of August.

Rivera added that the BOP may remain volatile in the near term but could stabilize as seasonal imports ease and global financial conditions improve.

“Sustained improvement will depend on stronger investment inflows and steady export performance,” he said.

Meanwhile, SM Investment Corp. group economist Robert Dan Roces said the widening cumulative deficit should be viewed as a matter of timing rather than weakening fundamentals.

“The widening cumulative BOP deficit reflects a timing and composition story rather than a sudden loss of external strength,” Roces said.

According to Roces, November’s sharp narrowing was supported by seasonal remittance inflows, portfolio adjustments and some easing in import payments.

In contrast, the year-to-date deficit was driven by earlier front-loaded imports of capital goods and energy, a weaker trade balance amid softer global demand and episodic portfolio outflows during periods of higher US yields and foreign exchange volatility.

“At the same time, foreign direct investment and remittances remained broadly supportive, preventing a more severe deterioration,” Roces said. “In short, the deficit widened mainly because imports and financial outflows arrived earlier and faster than exports and inflows, not because the Philippines’ external buffers fundamentally weakened.”

The November BOP position also reflects an increase in the final gross international reserves (GIR) level to $111.3 billion in November.

The GIR represents an adequate external liquidity buffer equivalent to 7.4 months’ worth of imports of goods and payments of services and primary income. It also covers about four times the country’s short-term external debt based on residual maturity.

The BSP expects the BOP position to hit a deficit of $6.9 billion for this year and $3.4 billion in 2026.