BSP: PH BOP deficit narrowed in April
More foreign currency left the Philippines than entered in April, pushing the country’s balance-of-payments (BOP) deficit close to the central bank’s full-year estimate just four months into 2026, as higher oil prices driven by Middle East conflict and a flight to safety fueled foreign outflows.
The Philippines’ BOP—an accounting of the country’s transactions with the rest of the world—posted a $2.12-billion deficit in April, data from the Bangko Sentral ng Pilipinas (BSP) showed.
Even so, it was the narrowest gap in three months or since the $373-million deficit recorded in January.
In the first four months, the deficit reached $7.4 billion, 34-percent wider than a year earlier. It already accounted for 95 percent of the BSP’s year-end estimate of a $7.8-billion BOP deficit.
Consequently, the country’s gross international reserves—foreign assets that serve as a buffer against external shocks—slipped to $104.3 billion in April, a 15-month low. The stockpile still covered 6.9 months of imports and was roughly 3.8 times the country’s short-term external debt based on residual maturity, well above global adequacy metrics.
John Paolo Rivera, senior research fellow at the Philippine Institute for Development Studies, said the narrower BOP gap during the month suggested that some pressure on the country’s external accounts may have eased likely due to stronger inflows from remittances, services exports, foreign borrowings and a possible moderation in import payments.
“External position will remain sensitive to oil prices, global financial conditions, and investor sentiment,” Rivera said.
For Ruben Carlo Asuncion, chief economist at UnionBank of the Philippines, the smaller deficit in April reflected some normalization after earlier outflows. But he said the wider year-to-date gap highlighted “persistent external pressures, particularly from the country’s large trade deficit amid strong import demand and softer exports.”
“While remittances and services continue to provide support, these have not been enough to offset the current account shortfall, with capital flows remaining sensitive to global conditions,” Asuncion said.
Now in its third month, the conflict involving the United States, Israel and Iran has disrupted traffic through the Strait of Hormuz, a narrow passage that carries about one-fifth of the world’s oil supply. The upheaval has helped drive up global oil prices, forcing net energy importers like the Philippines to pay more dollars for oil.
The turmoil has also pushed investors toward safer assets, triggering a sell-off in Philippine equities and sending the peso to record lows past 61 to the dollar. The central bank has projected the BOP deficit to widen further to $8.5 billion, or 1.6 percent of gross domestic product, in 2027.
“Our external position remains ‘deficit but resilient,’ supported by strong fundamentals like remittances, services exports, and adequate reserves,” said Jonathan Ravelas, senior adviser at Reyes Tacandong & Co. “Going forward, it’s about watching global conditions and capital flows closely, while ensuring we sustain these stable sources of foreign exchange.”
