BoP position swings to $706-million surplus in October

By Katherine K. Chan

THE PHILIPPINES’ balance of payments (BoP) position swung to a surplus in October, narrowing the country’s external position gap in the 10-month period, the central bank said.

Data from the Bangko Sentral ng Pilipinas (BSP) showed that the country’s BoP registered a surplus of $706 million in October, a turnaround from the $724-million deficit seen a year ago.

This was also wider than the $82-million surfeit in September and marked the third consecutive month that the BoP stood at a surplus.

“The Philippines’ balance of payments registered a $706-million surplus in October 2025, reflecting improved external accounts,” the BSP said in a statement released late on Wednesday.

BoP refers to the country’s economic transactions with other nations. A surplus indicates more funds entered into the country, while a deficit shows that the country spent more than it received.

The BoP surplus in October brought the country’s 10-month deficit to $4.609 billion, a reversal from the $4.393-billion surplus in the same period last year.

“For January-to-October 2025, the BoP recorded an overall deficit of $4.6 billion, showing signs of narrowing as inflows strengthened,” the central bank said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort noted that the BoP surplus in October was the best in eight months or since February 2025.

In a note, Mr. Ricafort attributed this to improved weather conditions and the expected tail-end of the seasonal rise in imports in the third quarter.

He said the seasonal increase in remittances and export sales would be positive factors for the country’s BoP position in the fourth quarter.

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said in a Viber message that increased inflows from exports, remittances and the business process outsourcing sector likely boosted the country’s BoP surplus.

“If global conditions stabilize and imports normalize, we could see the BoP deficit narrow further by yearend,” he added. “But watch out for (US Federal Reserve) policy and oil prices — they’re still key risks.”

Mr. Ricafort also said US President Donald J. Trump’s recent move to exempt some agricultural products from reciprocal tariffs would also help improve the country’s balance of trade and external position.

“For the coming months, BoP data would improve further if anti-corruption measures and other reform measures, especially in further leveling up the country’s governance standards, are taken seriously, just like 10-15 years ago, as these help further improve international investor sentiment or confidence (in) the country,” he added.

The central bank expects the overall BoP position to end at a $6.9-billion deficit this year or -1.4% of gross domestic product.

DOLLAR RESERVES
Meanwhile, the BSP said the country’s latest BoP position reflected the 1% increase in gross international reserves (GIR) at $110.2 billion at end-October from $109.1 billion at end-September.

“The rise in reserves to $110.2 (billion) gives us a solid buffer against external shocks,” Mr. Tacandong said.

In the 10-month period, the level of dollar reserves was equivalent to 7.4 months’ worth of imports of goods and payments of services and primary income, well above the three-month standard.

“Specifically, the latest GIR level ensures availability of foreign exchange to meet balance of payments financing needs, such as for payment of imports and debt service, in extreme conditions when there are no export earnings or foreign loans,” the central bank said.

It also covers around 3.8 times the country’s short-term external debt based on residual maturity.

The country’s gross reserves are made up of foreign-denominated securities, foreign exchange, and other assets such as gold. Aside from financing its external obligations, these are used by the central bank to help stabilize the peso and also serve as a buffer against global economic disruptions.

The BSP sees dollar reserves settling at $105 billion by yearend.