By Luisa Maria Jacinta C. Jocson, Reporter

THE PHILIPPINES in January posted its biggest balance of payments (BoP) deficit in over a decade, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

The BoP deficit stood at $4.1 billion in January, ballooning from the $740-million gap in the same month a year ago.

It was also nearly triple the $1.5-billion deficit posted in December.

This marked the widest BoP deficit in 11 years or since the $4.48-billion shortfall in January 2014.

The BoP summarizes the country’s transactions with the rest of the world. A deficit means more funds left the country, while a surplus shows that more money came in.

“The BoP deficit in January 2025 reflected the BSP’s net foreign exchange operations and drawdowns by the National Government (NG) on its foreign currency deposits with the BSP to meet its external debt obligations,” the central bank said.

Latest data from the Bureau of the Treasury showed the NG’s outstanding debt hit P16.05 trillion at the end of 2024, up by 9.8% from P14.62 trillion at end-2023.

Earlier BSP data showed the country’s outstanding external debt hit a record high of $139.64 billion as of end-September. This brought the external debt-to-GDP ratio to 30.6% at the end of the third quarter.

The external debt service burden jumped by 14% to $15.735 billion in the 11-month period, according to the latest central bank data.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the wider BoP deficit was also due to the recent peso volatility.

The peso depreciated to P58.365 at end-January, weaker by 52 centavos from the P57.845 finish at end-December.

“The BoP deficit for January is primarily due to interest and debt payments, which can also be considered as foreign exchange intervention by the central bank to maintain the Philippine peso’s stability against the US dollar,” Oikonomia Advisory and Research, Inc. economist Reinielle Matt M. Erece said.

“This entails large withdrawals of the country’s cash reserves to pay its obligations and meet its targets,” he added.

At its end-January position, the BoP reflects a gross international reserve (GIR) level of $103.3 billion, down by 2.8% from $106.3 billion as of end-2024.

Mr. Ricafort said the relatively higher GIR provided “greater cushion for the peso exchange rate vs. the US dollar.”

This was supported by the “continued growth in the country’s structural US dollar inflows especially from overseas Filipino worker remittances, business process outsourcing revenues, foreign tourism receipts and foreign investments, among others.”

Despite the decline, the dollar buffer is enough to pay for 7.3 months’ worth of imports of goods and payments of services and primary income.

The reserves can also cover about 3.7 times the country’s short-term external debt based on residual maturity.

For the coming months, the BoP position could improve due to the NG’s latest global bond issuance, Mr. Ricafort said.

The Philippines raised $3.3 billion from the sale of dual-tranche US-dollar global bonds, as well as a euro sustainability bond, in late January.

In 2024, the country’s full-year BoP position stood at a surplus of $609 million, falling by 83.4% from the $3.672-billion surplus at end-2023.

This year, the BSP expects a $2.1-billion surplus position, equivalent to 0.4% of economic output.