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Keisha Ta-Asan - The Philippine Star
September 14, 2025 | 12:00am
“This development reflected the narrowing trade in goods deficit, alongside the increases in net receipts in the primary and secondary income accounts,” the BSP said. “However, these gains were partly muted by the lower net receipts from trade in services.”
Philstar.com / Irra Lising
MANILA, Philippines — The country’s current account deficit eased to $5 billion in the second quarter, down by 15.8 percent from $5.9 billion a year ago, as stronger exports helped trim the trade gap, according to the Bangko Sentral ng Pilipinas (BSP).
“This development reflected the narrowing trade in goods deficit, alongside the increases in net receipts in the primary and secondary income accounts,” the BSP said. “However, these gains were partly muted by the lower net receipts from trade in services.”
The current account records a country’s trade in goods and services, income from abroad and secondary transfers such as remittances. A deficit means the Philippines spends more on imports and other external payments than it earns from exports and inflows.
The narrower deficit, equivalent to -4 percent of gross domestic product from -5.2 percent of GDP in the same quarter last year, was supported by resilient shipments of copper anodes, electronics and mineral exports such as nickel and gold.
Exports of goods surged by 17.5 percent to $16.3 billion, outpacing the 4.9-percent rise in imports to $32.3 billion. This helped narrow the trade in goods deficit to $16 billion from $17 billion last year.
Remittances from overseas Filipino workers also provided steady inflows, offsetting weaker services receipts due to higher outbound travel spending. Remittance inflows climbed by 3.4 percent to $7.2 billion during the quarter.
Despite the narrower current account shortfall, the Philippines still booked an overall balance of payments (BOP) deficit of $2.6 billion in the second quarter, reversing the $1.2-billion surplus a year ago.
The BSP attributed this to weaker financial inflows as local banks repaid foreign loans and foreign investors turned more cautious amid global market uncertainties.
Year to date, the current account deficit stood at $9.2 billion in the first half (equivalent to -3.9 percent of GDP), 13.6 percent higher than the $8.1 billion deficit (-3.6 percent of GDP) recorded from January to June 2024.
“The expansion was primarily attributable to the larger trade in goods deficit and the lower net receipts from trade in services. This development was partly mitigated by the higher net receipts recorded in both the primary and secondary income accounts,” the BSP said.
The trade in goods deficit widened by 2.8 percent to $32.5 billion in the first half from the $31.7 billion deficit posted in the same period last year. This was due to the higher absolute increase in imports compared to exports.
The country’s BOP position also posted a deficit of $5.6 billion in the first semester, reversing the $1.4-billion surplus a year ago.
“The shift to a BOP deficit was mainly driven by lower net inflows in the financial account, along with a wider current account deficit,” the BSP said. “Financial account net inflows declined as portfolio investment moderated, largely due to residents’ investments in foreign debt securities.”
The BSP expects the country’s BOP to reach a deficit of $6.3 billion (-1.3 percent of GDP) this year, before narrowing to a $2.8 billion gap (-0.5 percent of GDP) in 2026.
It also sees the current account deficit hitting $16.3 billion (-3.3 percent of GDP) in 2025 and $13.6 billion (-2.5 percent of GDP) next year.
