Current account deficit narrows in 9 months

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December 13, 2025 | 12:00am

MANILA, Philippines — The Philippines posted a narrower current account deficit in the January to September period as resilient exports, steady services receipts, and solid inflows from overseas Filipinos helped offset a still-wide trade gap, according to data from the Bangko Sentral ng Pilipinas (BSP).

The current account shortfall eased to $12.5 billion during the nine-month period from $13.3 billion a year earlier, equivalent to 3.6 percent of gross domestic product.

The improvement reflected “strong global demand for manufactured goods, minerals and electronics,” which kept exports resilient even as imports remained elevated due to demand for telecommunications equipment, electrical machinery and passenger vehicles.

Despite this, the country’s overall external position weakened as the balance of payments (BOP) swung to a $5.3-billion deficit during the nine-month period, reversing the $5.1-billion surplus posted a year earlier.

The BSP attributed the reversal to “tighter global financial conditions and lingering trade uncertainties.”

The merchandise trade deficit stood at $50 billion in January to September, nearly unchanged from the year-ago level. Exports rose by 5.9 percent to $123.8 billion, while imports increased by 4.6 percent to $136.3 billion.

Services exports, particularly from the business process outsourcing industry and travel sector, continued to provide a cushion, delivering $9.8 billion in net receipts, only slightly below last year’s $10 billion.

Primary income flows recorded $3.8 billion in net receipts, supported by steady earnings of Filipinos working abroad. Secondary income, which includes remittances, expanded to $24 billion in net receipts from $23.3 billion.

These inflows “continued to provide a buffer to the external position,” the BSP noted in its release. Personal remittances reached $29 billion during the period, up by 3.2 percent.

The capital account recorded a $77-million surplus, rising sharply from $54 million in the same period last year on the back of higher receipts from grants and other one-time transfers.

The financial account generated $12.2 billion in net inflows, a significant improvement from $21.6 billion in net inflows a year earlier.

The BSP said the inflows reflected “continued investor interest and steady capital inflows,” driven by foreign direct and portfolio investments as well as borrowings by the national government.

For the quarter alone, the BOP posted a $273-million surplus, sharply lower than the $3.7-billion surplus in the same period last year due to a smaller contraction in the current account and weaker financial flows.