By Justine Irish D. Tabile, Senior Journalist
Philippine salary balancements (BoP) deficit widened In March, driven by a higher trade gap and increased global uncertainty, the Bangko Sentral ng Pilipinas (BSP) data shown on Monday.
The country’s BoP position stood at a deficit of $2.637 billion last month, up from a $1.966 billion deficit in the same month in 2025 and a $2.277 billion deficit in February.
March was the fifth month in a row that the country’s BoP position was negative. It was the largest BoP deficit in 14 months or since the restoration of the $4.078 billion deficit.released in January 2025.
This brought the three-month BoP deficit to $5.288 billion from a deficit of $2.958 billion last year.
BoP refers to a country’s economic trade with other nations. A surplus shows more money coming into the country, while a deficit shows that the country spent more money than it received.
“The wide BoP deficit is primarily a function of the trade gap remaining high – imports holding back strong domestic demand – now combined with higher oil prices and global financial stability,” said Robert Dan J. Roces, group economist at SM Investments Corp. (SMIC), in a Viber message.
“Higher US rates reduce portfolio inflows, while geopolitical risk increases the import bill and risk,” he added.
Preliminary data from the Philippine Statistics Authority (PSA) showed that the trade deficit widened to $3.68 billion in February from $2.99 billion a year ago. The PSA is scheduled to release trade data for March on May 30.
Ateneo Center for Economic Research and Development Director Ser Percival K. Peña-Reyes said that BoP losses are increasing because the country is paying more for exports, especially oil, while exports and investments are not growing fast enough.
“Global factors are tightening. Oil prices are widening the trade deficit. US rates are reducing capital inflows. Geopolitics is increasing both. The global recession is weakening exports,” he said in a Facebook Messenger chat.
Therefore, when these factors move in the same direction, they create a combined effect, making the BoP deficit wider than any single factor. the cause itself,” he added.
Rising oil prices and falling gasoline prices have forced the government to declare a one-year national energy emergency and suspend the kerosene tax. and liquefied petroleum gas.
Mr. SMIC’s Roces said it is unlikely that the BoP position will return to surplus this year.
“The most logical way is a small but manageable deficit, and development depends on low oil prices, a reduction in global prices, and strong inflows from tariffs, outsourcing of business processes, and foreign direct investment,” he said.
“Importantly, the deficit in this category is not a red flag – it shows economic investment and growth, and import demand is related to growth and capacity building and remains stable as long as income and reserves remain the same,” he added.
Mr. Peña-Reyes said that it is possible to see the BoP’s position turn into a surplus, but it is not a fundamental case.
“Most offMarket and market forecasts still point to a small BoP deficit in 2026, although there is a chance of improvement compared to 2025 rather than a return to surplus,” he said.
“We have told you everything, the expected way is a small deficit, not going back to a lot of money,” he added.
This year, the central bank expects the BoP position to end with a debt of $7.8 billion or -1.5% of the country’s gross domestic product.
Last year, the BoP deficit stood at $5.661 billion, a result of the $609-million surplus recorded in 2024.
POEMS
Meanwhile, the gross of the Philippines international reserves (GIR) decreased to $106.6 billion from at the end of March from $107.51 billion previously reported by the central bank. It was also lower than the GIR of 113.26 billion at the end of February.
“This level of reserves remains an adequate buffer of foreign exchange, equivalent to 7.0 months worth of imports of goods and services and basic income,” said the BSP.
It also covers about 3.9 times the country’s short-term external debt based on remaining maturities, it added.
GIR includes foreign securities, foreign currency, and other assets such as gold. It enables a country to finance imports and external debt, maintain its currency stability, and protect itself from global economic shocks.
The BSP projects that the Philippine dollar will eventually reach $111 billion by the end of the year.
