BOP reverts to surplus in February

MANILA, Philippines —  The country’s balance of payments (BOP) position finally reverted to a surplus in February, ending four months of deficits, according to the Bangko Sentral ng Pilipinas (BSP).

Preliminary data released by the central bank showed that the $3.09-billion BOP surplus recorded last month put an end to the series of shortfalls recorded since October.

The amount marked a significant turnaround from the $4.08-billion deficit recorded in January and the $196-million shortfall in February last year.

“The BOP surplus reflected the national government’s net foreign currency deposits with the BSP, which include proceeds from ROP Global Bonds, and net income from the BSP’s foreign investments,” the central bank said.

The Philippines successfully raised $3.3 billion in dollar and euro bonds in January, leaving only a small balance of $250 million to $500 million in potential additional foreign borrowing for the year.

The BOP is the difference in total values between payments into and out of the country over a period. A surplus means more dollars flowed into the country from exports, remittances from overseas Filipino workers, business process outsourcing earnings and tourism receipts than what flowed out to pay for the importation of more goods, services and capital.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the surplus last month was the highest in five months of since the $3.53-billion surplus booked in September 2024.

Aside from the global bond issuance, Ricafort cited the continued gains in gold holdings after world prices hit a new record high of $2,956 per ounce on Feb. 24, 2025 as well as gains on foreign investments amid lower US Treasury/government bonds recently.

For the first two months of 2025, the country’s BOP position stood at a deficit of $992 million, slightly higher than the $936-million gap in the same period a year ago.

“The year-to-date deficit reflected mainly the widening trade in goods deficit and net outflows from foreign portfolio investments but was partially offset by net receipts from foreign borrowings by the national government and personal remittances,” the BSP said.

Latest data from the Philippine Statistics Authority (PSA) showed that the country’s trade deficit widened by 17 percent to $5.09 billion in January from $4.36 billion in the same month last year.

Exports grew by 6.4 percent to $6.36 billion from $5.98 billion, while imports went up by 10.8 percent to $11.45 billion from $10.34 billion.

“The improved BOP position mirrored the increase in the final gross international reserves (GIR) to $107.4 billion as of end-February, up from $103.3 billion at the end of January,” the BSP said.

The latest GIR level provides a robust external liquidity buffer equivalent to 7.4 months’ worth of imports of goods and payments of services and primary income. It also covers about 3.8 times the country’s short-term external debt based on residual maturity.