Philippines swings back to dollar surplus

MANILA, Philippines — The Philippines broke its streak of dollar deficit to post its largest balance of payments (BOP) surplus in five months in February, mainly due to inflows from the Marcos administration’s foray into the international debt market.

Latest data from the Bangko Sentral ng Pilipinas (BSP) showed the country registered $3.1 billion more inbound payments than outbound funds in February, a turnaround from the $4.1-billion BOP deficit in January.

READ: Philippine dollar deficit hits $4.1B in January, widest in 11 years

Zooming out, the BOP surplus in February snapped four straight months of deficits. It was the highest windfall since the $3.53-billion surplus in September, giving the country more dollar resources that can be used to transact with the rest of the world.

That trimmed the year-to-date BOP deficit to $992 million.

For the entire 2025, the BSP projected a surplus of $2.1 billion, or equivalent to 0.4 percent of gross domestic product.

According to the central bank, the windfall in February emanated from fresh foreign borrowings of the government. Recall that the government had raised a total of $3.25 billion during its sale of US dollar and euro-denominated bonds in late January.

READ: Philippines returns to offshore debt market with US dollar, euro bond offers

Investment gains

The BSP also attributed the surplus to gains from its investments abroad.

“For the coming months, sustained growth in the country’s structural US dollar inflows would lead to better data for BOP,” said Michael Ricafort, chief economist at Rizal Commercial Banking Corp.

The BSP said the improved BOP position in February brought the gross international reserves (GIR) to $107.4 billion, up from $103.3 billion at the end of January.

This latest GIR level provides a robust external liquidity buffer that is equivalent to 7.4 months’ worth of imports of goods and payments of services and primary income.

At the same time, the buffer funds could cover around 3.8 times the country’s short-term external debt based on residual maturity.

By convention, the GIR is viewed to be adequate if it can finance at least three months’ worth of the country’s imports of goods and payments of services and primary income.

The BSP forecasts a $110-billion GIR by the end of 2025.

 

(2025/03/20-02:28)