The Philippines’ balance of payments (BOP) deficit widened to $2.6 billion in April 2025, driven mainly by a larger trade in goods deficit and the government’s withdrawal of US dollar stock to settle foreign debt payments.

According to the Bangko Sentral ng Pilipinas (BSP), the deficit in April was significantly higher than the $639 million shortfall posted in the same month last year. This wider BOP deficit marks a decrease of more than 300 percent, or $2 billion, year-on-year.

“The BOP deficit reflected the national government’s drawdowns on its foreign currency deposits with the BSP to meet its external debt obligations and pay for its various expenditures, and the BSP’s net foreign exchange operations,” the BSP said in a statement released on Monday, May 19.

This brought the country’s cumulative BOP deficit to $5.5 billion from January to April, wider by 12.7 times than the $401 million shortfall recorded in the same period last year.

“Based on preliminary data, this year-to-date BOP deficit reflected mainly the widening trade in goods deficit,” the central bank said.

The country’s trade deficit widened to $12.7 billion in the first quarter of 2025, higher than the $11.3 billion shortfall recorded in the same period last year, according to the Philippine Statistics Authority (PSA).

However, it noted that this decline was partly muted by the continued net inflows from personal remittances from overseas Filipinos and foreign borrowings by the Marcos administration.

According to the BSP, the BOP deficit reflected a drop in the country’s US dollar stock or gross international reserves (GIR), which fell to $105.3 billion at the end of April from $106.7 billion in March.

Still, “this latest GIR level provides a robust external liquidity buffer, equivalent to 7.3 months' worth of imports of goods and payments of services and primary income,” it said.

It also covers about 3.7 times the country’s short-term foreign debt based on residual maturity.

Short-term debt based on residual maturity includes all foreign debt originally due in one year or less, along with upcoming principal payments on medium-term and long-term loans from both the public and private sectors that are set to mature within the next 12 months.