THE surge in import bill and soft demand for Philippine exports widened the country’s balance of payments (BOP) 4-month deficit to a level that exceeded the $5.66-billion gap for all of 2025.
Latest data from the Bangko Sentral ng Pilipinas (BSP) showed that the BOP deficit in January to April reached $7.4 billion. For April alone, the Philippines recorded a BOP deficit of $2.1 billion.
The overall BOP position, the central bank said, denotes the transactions of the country with the rest of the world.
While the $2.124-billion deficit in April is 16.97 percent narrower than the previous year’s $2.558 billion, and 19.45 percent leaner than the $2.637-billion gap registered in March, the $7.41-billion BOP shortfall in January to April is the largest-ever on record.
The $7.41-billion BOP deficit in the four-month period also exceeded the $7.26 billion recorded in 2022. The latest figure is now within striking distance of the central bank’s $7.8-billion deficit forecast for 2026.
In a statement in March, the central bank said the Philippine balance of payments is projected to remain ‘under pressure over 2026-2027 amid a challenging global environment and structural constraints.’ (See: https://businessmirror.com.ph/2026/04/02/bsp-resets-bop-projection-sees-wider-gap-in-2026-2027/).
Structural pressures
Analysts indicated that structural pressures are hounding import-driven Philippines, adding that the economy will remain sensitive to oil prices, global financial conditions, and investor sentiment.
Ruben Carlo Asuncion, chief economist at Union Bank of the Philippines (UBP) said: ‘The wider year-to-date gap underscores persistent structural pressures-particularly the large trade deficit driven by strong import demand and softer exports.’
Jonathan L. Ravelas, senior adviser at Reyes Tacandong and Co. said while the narrowing of the BOP in April is a ‘modest but positive signal,’ the Philippines is still an ‘import-driven economy.’
‘So, a BOP deficit will likely persist in the near term,’ added Ravelas.
John Paolo Rivera, Senior Research Fellow at state-run think tank Philippine Institute for Development Studies (PIDS) agreed with Ravelas. ‘External position will remain sensitive to oil prices, global financial conditions, and investor sentiment.’
April data
Despite the widest-ever year-to-date shortfall recorded, data from the central bank showed the BOP gap recorded in April alone eased due to strong dollar inflows from remittances and services exports.
‘The narrower BOP deficit in April reflects a normalization of foreign exchange flows after earlier outflows, with continued support from remittances and services,’ Asuncion said.
Ravelas noted the narrower deficit seen in April ‘reflects steady dollar inflows from remittances and BPOs, some improvement in capital flows and a slightly softer import bill.’
For his part, Rivera said the reduction in the country’s foreign reserves indicates that the central bank may have used part of the buffer to smooth peso volatility and meet external obligations.
‘Despite the drop, GIR [gross international reserves] level remains adequate and continues to provide a strong buffer against external shocks,’ said Rivera.
Latest BSP data showed the country’s GIR settled at $104.3 billion as of end-April 2026. This is the lowest GIR in 15 months.