BOP shortfall widens to $2.3 billion in February

March 21, 2026 | 12:00am

MANILA, Philippines — The country’s balance of payments (BOP) position swung to a $2.3-billion deficit in February, as wider external payments tied to the trade deficit and foreign debt obligations weighed on the country’s external position.

Data from the Bangko Sentral ng Pilipinas (BSP) showed that the February figure was a reversal of the $3.09-billion surplus in the same month in 2025. It was also significantly wider than the $373-million deficit recorded in January.

This brought the year-to-date shortfall to $2.65 billion, more than double the $992-million gap last year, reflecting mounting external pressures early in the year.

The BOP summarizes the country’s transactions with the rest of the world and serves as a key indicator of external sector health.

“The BOP deficit could reflect the country’s trade deficit and some payment of foreign debt,” RCBC chief economist Michael Ricafort said.

Ricafort added that geopolitical risks in recent months, including developments involving Iran, Venezuela and Greenland, may have prompted precautionary hedging of import requirements.

According to the Philippine Statistics Authority, the country incurred a $4.05-billion trade deficit in January, the highest level in three months. Exports rose by eight percent to $7.09 billion, while imports declined by three percent to $11.14 billion.

Despite the BOP deficit, the country’s external liquidity buffer remained robust, with gross international reserves (GIR) rising to $113.3 billion as of end-February.

“This level of reserves remains an adequate external liquidity buffer, equivalent to 7.5 months’ worth of imports of goods and payments of services and primary income,” the BSP said.

The central bank added that reserves also cover about 4.3 times the country’s short-term external debt based on residual maturity, indicating sufficient capacity to meet external obligations even amid global uncertainties.

GIR consists of foreign-denominated securities, foreign exchange and other reserve assets such as gold, which help ensure adequate dollar liquidity for imports and debt servicing, while providing a buffer against external shocks and currency volatility.

Ricafort said that both the BOP and trade deficit could widen in the coming months as global oil and energy prices surged following the escalation of conflict in Iran and the broader Middle East since late February.

He said higher energy costs could drive up prices of goods and services and add to inflationary pressures, while heightened volatility in global and domestic financial markets may dampen foreign portfolio and direct investments.

Ricafort also warned that disruptions in parts of the Middle East could weigh on remittances from overseas Filipino workers, adding another layer of risk to the country’s external position.

The BSP expects the country’s BOP position to hit a deficit of $5.9 billion this year, or equivalent to -1.2 percent of gross domestic product.

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