The Central Bank of the Philippines published balance of payments (BOP) data showing a USD 2.6 billion deficit in the second quarter of 2025, reversing a USD 1.2 billion surplus in the same period of 2024. The shift was driven primarily by lower net inflows in the financial account. The financial account weakened as local banks increased lending to nonresidents and settled foreign obligations (captured in the other investment account), while portfolio and direct investment net inflows also declined as investors adopted a more cautious stance amid global financial uncertainty. By contrast, the current account deficit narrowed during the quarter, supported by increased trade in goods. For the first half of 2025, the BOP recorded a USD 5.6 billion deficit, reversing a USD 1.4 billion surplus in January to June 2024. The deterioration reflected lower net financial account inflows, including moderated portfolio investment linked to residents’ investments in foreign debt securities and reduced other investment inflows as banks provided more loans to nonresidents, alongside a wider current account deficit driven by a larger goods trade gap and lower net receipts from trade in services.
Central Bank of the Philippines 2025-09-12
Central Bank of the Philippines reports USD 2.6 billion balance of payments deficit in Q2 2025 as financial account inflows weaken
The Central Bank of the Philippines reported a USD 2.6 billion balance of payments deficit in Q2 2025, reversing a USD 1.2 billion surplus from the same period in 2024, due to lower net inflows in the financial account. Local banks increased lending to nonresidents and settled foreign obligations, while portfolio and direct investment net inflows declined amid global financial uncertainty. For H1 2025, the BOP recorded a USD 5.6 billion deficit, reflecting reduced financial account inflows and a wider current account deficit.