The reversal of the Philippines’ balance of payments (BOP) position to a surplus in June brought down the country’s BOP deficit by 3.5 percent to $5.6 billion in the first six months of 2025.

Data from the Bangko Sentral ng Pilipinas (BSP) showed that the BOP, which reflects the country’s transactions with the rest of the world, narrowed in the January-to-June period from the wider $5.8-billion deficit a year ago.

In June alone, the Philippines’ BOP posted a $226-million surplus, a turnaround from the $155-million deficit in the same month last year and the $298-million shortfall recorded in May.

As per the BSP, the BOP surplus reflected the national government’s foreign currency deposits with the central bank. It also reflected the income from BSP investments.

Meanwhile, the latest BSP data showed that the year-to-date BOP deficit was “largely due to the continued trade-in-goods deficit,” the central bank reported on Friday, July 18.

The goods trade deficit for the first five months of the year narrowed to $19.7 billion, down from $20.7 billion a year earlier, according to the Philippine Statistics Authority (PSA).

Despite the continued trade deficit, the BSP said this was offset by “the sustained net inflows from personal remittances from overseas Filipinos (OF), national government’s foreign borrowings, and foreign portfolio investments.”

The BSP noted that the June BOP surplus reflected the increase in the country’s gross international reserves (GIR) or United States (US) dollar stock, which climbed by 0.8 percent to $106 billion by end-June from $105.2 billion in the previous month.

It also noted the latest GIR level offers solid external liquidity, enough to cover 7.2 months’ worth of imports and payments for services and primary income.

“Specifically, the latest GIR level ensures availability of foreign exchange (forex) to meet BOP financing needs—such as for payment of imports and debt service—in extreme conditions when there are no export earnings or foreign loans,” the BSP explained.

It also covers about 3.4 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.