A surplus in May helped narrow the overall balance of payments (BOP) deficit for the Philippines to $7.28 billion for the first five months of 2026 from $7.41 billion in the previous month.

While the cumulative gap remains significant, the May performance provided a slight reprieve from the persistent monthly deficits seen earlier in the year.

This five-month total continued to exceed the $5.66 billion full-year deficit recorded in 2025, according to the latest data released by the Bangko Sentral ng Pilipinas (BSP) on Friday night, June 19.

According to the BSP, the end-May BOP position was driven by a sustained deficit in trade in goods, and foreign portfolio investment outflows.

“However, this was partly offset by the sustained net inflows from personal remittances of overseas Filipinos (OFs), foreign borrowings by the national government (NG), trade in, services, and foreign direct investments (FDIs),” the BSP said.

For May alone, the BOP recorded a surplus of $131 million, a reversal from a series of massive monthly deficits: $373 million in January, $2.28 billion in February, $2.64 billion in March, and $2.12 billion in April.

According to the central bank’s latest forecast of a $7.8 billion full-year deficit for 2026, the country has now reached 93.3 percent of that projection within the first five months of the year.

Consequently, the country’s gross international reserves (GIR) or the US dollar stock settled at $104 billion as of end-May. This further declined from the $104.3 billion reported in April and the peak of $113.3 billion seen in February.

According to the BSP, the end-May level of reserves remains an adequate external liquidity buffer, equivalent to 6.7 months of imports and payments for services and primary income. It also provides coverage of about 3.9 times the country’s short-term external debt based on residual maturity.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the improving BOP position was partly driven by lower global crude oil prices following easing geopolitical tensions.

Personal remittances, which include and remittances in kind, reached $3.04 billion in April, higher than $2.97 billion in the same month last year. As of end-April personal remittances reached $12.70 billion, a 2.7 percent increase from the $12.37 billion a year ago.

During the four-month period, the foreign debt of the NG continued to swell, reaching ₱6.06 trillion, rising by 1.7 percent from ₱5.95 trillion in the previous month. This expansion was largely fueled by the weakening of the peso against the US dollar and third-currency movements.

Net inflows of FDI into the Philippines declined by 17 percent to $1.72 billion in the first quarter of 2026, from $2.07 billion in the same period in 2025 as global uncertainty weighed on investor sentiment and prompted caution.

Looking ahead, Ricafort said further declines in oil prices, strong dollar inflows, and proceeds from the June 2026 bond issuance may continue to strengthen the country’s external economic position. (Derco Rosal)