By Luisa Maria Jacinta C. Jocson, Senior Reporter

THE PHILIPPINES’ balance of payments (BoP) deficit widened further in April as the government paid back its external debt, data from the Bangko Sentral ng Pilipinas (BSP) showed.   

The BSP on Monday said the BoP deficit stood at $2.56 billion in April, wider than the $639-million gap a year ago and the $1.97-billion shortfall in March.

The BoP measures the country’s transactions with the rest of the world. A deficit indicates more funds exited the Philippines while a surplus means more money entered the country than left.

“The BoP deficit reflected the National Government’s (NG) 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 central bank said.

Latest data from the BSP showed the Philippines’ outstanding external debt rose by an annual 9.8% to $137.63 billion as of end-December 2024.

This brought the external debt-to-gross domestic product (GDP) ratio to 29.8% at the end of 2024 from 28.7% in the previous year.

The country’s BoP position stood at a $5.52-billion deficit in the first four months of 2025, ballooning from the $401-million gap a year ago.

“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 balance in goods stood at a $4.13-billion deficit in March, 23% higher than a year ago. This brought the first-quarter trade deficit to $12.71 billion, also widening by 12.8% year on year.

“This decline was partly muted, however, by the continued net inflows from personal remittances from overseas Filipinos and foreign borrowings by the NG,” it added.

Cash remittances rose by 2.6% in March to $2.81 billion, though this was the slowest growth in nine months.

The NG’s gross borrowings declined by 7.15% to P192.45 billion in March as gross external debt fell by 31.89%.

Meanwhile, the BoP reflected a final gross international reserve (GIR) level of $105.3 billion at its end-April position, lower than $106.7 billion as of end-March.

“This latest GIR level provides a robust external liquidity buffer,” the central bank said.

The dollar reserves were enough to cover 3.7 times the country’s short-term external debt based on residual maturity.

An ample level of foreign exchange buffers safeguards an economy from market volatility and is an assurance of the country’s capability to pay debt in the event of an economic downturn.

The GIR was also equivalent to 7.3 months’ worth of imports of goods and payments of services and primary income.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the wider BoP deficit was due to the continued trade gap and repayment of foreign currency debts and other foreign obligations.

However, he also noted the decline in foreign investments amid volatilities in financial markets due to the United States’ tariff policies.

For the coming months, Mr. Ricafort said the BoP position could improve due to proceeds from the NG’s foreign-currency debt that could add to the GIR.

He also cited “continued growth in OFW remittances, BPO revenues, exports, foreign tourism receipts, and other structural US dollar inflows of the country.”

“Going forward, any improvement in BoP data and in GIR data for the coming months could still help provide greater cushion for the peso exchange,” Mr. Ricafort said.

This year, the BSP expects the country’s BoP position to end at a $4-billion deficit, equivalent to -0.8% of gross domestic product.

The BoP position stood at a surplus of $609 million in 2024, plunging by 83.4% from the $3.672-billion surplus as of end-2023.