The Philippines’ balance of payments (BOP) surplus dropped to $609 million in 2024, sharply lower than the $3.7 billion recorded in 2023, as a wider current account deficit weighed on the country’s external position. 

This BOP decline marks a nearly 84 percent, or $3.1 billion decrease, year-on-year.

In the last quarter of 2024, the country’s BOP posted a $4.5 billion deficit, reversing from a $1.9 billion surplus in the same quarter of 2023.

“The shift to a BOP deficit was driven by the increase in current account deficit and reversal to net outflows in the financial account,” the BSP said in a March 14 statement. 

The country’s current account deficit expanded by over 41 percent to $17.5 billion in 2024, up from $12.4 billion in 2023.

According to the BSP, the wider current account deficit was driven by lower net earnings from services and a larger trade-in-goods shortfall. 

“However, this was offset partly by higher net receipts in the primary and secondary income accounts,” the central bank said. 

Likewise, the capital account posted net receipts of $72 million last year, down 2.9 percent from $74 million in 2023. This was attributed to lower net receipts from the national government’s capital transfers, which fell to $67 million from $70 million.

Meanwhile, the financial account recorded $17.6 billion in net inflows in 2024, reflecting higher borrowing by residents from abroad. This was higher by nearly 30 percent from $13.6 billion in 2023.

The BSP said the increase was driven by a shift in the portfolio investment account to net inflows from net outflows, along with higher net inflows in the direct investment account.

To recall, the country’s gross international reserves (GIR) stood at $106.3 billion by end-2024, up from $103.8 billion in 2023.

Fourth-quarter 2024 

Relative to the full-year surplus, the Philippines’ BOP swung to a $4.5-billion deficit in quarter-four 2024, reversing from a $1.9-billion surplus in 2023.

The country’s current account deficit widened to $4.6 billion in the last quarter of 2024, surging nearly 340 percent from the $1-billion deficit a year earlier. 

According to the central bank, the wider deficit was due to a “larger merchandise trade gap” and lower net earnings from services and primary income. “However, this was partially offset by higher net receipts in the secondary income account.”

Similarly, the capital account declined by nearly 14 percent in net receipts, clocking in to $19 million in the fourth quarter of 2024, down from $22 million a year ago.

This was due to lower net receipts from gross disposals of nonproduced nonfinancial assets, which fell to $1 million from $4 million.

Also, the financial account posted $2.9 billion in net outflows in quarter-four last year, reversing from $6.2 billion in net inflows a year earlier. As per the BSP, this was driven by portfolio and other investments shifting to outflows, partially offset by higher net inflows in direct investments.