WHILE the country’s balance of payments (BOP) recorded an eight-month-high surplus of $706 million in October 2025, persistent trade deficits, tariff policies and higher global uncertainty reversed the 10-month BOP into a deficit of $4.609 billion.
According to the Bangko Sentral ng Pilipinas (BSP), the country’s $706-million BOP surplus in October was a turnaround from the $724 million in deficit during the same month last year.
The BOP accounts for the transactions of the country with the rest of the world.
Better weather conditions, easing of political noise that previously caused volatility, seasonal tapering off of imports and an increase in remittances and export sales improved the country’s BOP, according to Michael L. Ricafort, chief economist at Rizal Commercial Banking Corporation.
‘Though still offset by the continued Trump risk factor/premium that led to some market volatility worldwide,’ Ricafort said.
Robert Dan Roces, group economist at SM Investments Corporation, said the October surplus reflects strong inflows from the national government’s external financing program and the usual lift from seasonal remittances and business process outsourcing receipts.
‘On top of that, import growth has softened, which naturally narrows the trade gap and helps the balance,’ Roces added.
GIR surplus
Meanwhile, the BSP said October’s surplus reflected the increase in gross international reserves (GIR) to $110.2 billion as of end-October 2025.
This level of reserves, the BSP said, remains an adequate external liquidity buffer, equivalent to 7.4 months’ worth of imports of goods and payments of services and primary income.
It covers about 3.8 times the country’s short-term external debt based on residual maturity.
10-month BOP: From surplus to deficit
During the January to October 2025 period, the BOP posted an overall deficit of $4.609 billion, ‘showing signs of narrowing as inflows strengthened,’ the BSP said.
This, however, is a reversal from the $4.393 billion surplus in the same period a year ago, based on BSP data.
Ricafort said this is partly due to the continued trade deficit of the country in recent months, foreign debt servicing and volatile markets due to local political noise, Trump tariff policies and higher global uncertainty.
‘Looking ahead, BOP should stay broadly stable, but foreign exchange stability will still hinge on US rate cuts, oil prices, and how quickly exports recover,’ Roces said.
He added that the risk now is less about liquidity and more about sentiment. ‘Any flare-up in geopolitics or tariffs can easily swing the monthly numbers.’
Anti-corruption measures and other reform measures, Ricafort added, will help further improve international investor sentiment on the country, which could improve the BOP data in the coming months.
The BOP accounts for the transactions of the country with the rest of the world.
GIR, meanwhile, are made up of foreign-denominated securities, foreign exchange, and other assets, including gold.
GIR help a country finance its imports and foreign debt obligations, stabilize its currency, and provide a buffer against external economic shocks.