An economist expects the country’s balance of payments (BOP) to recover in 2026 despite a wider deficit recorded last year.
Data from the Bangko Sentral ng Pilipinas (BSP) showed a $827-million BOP deficit in December 2025, wider than the $225-million deficit in November. This brought the full-year BOP deficit to $5.7 billion.
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the BOP — which tracks the country’s transactions with the rest of the world — is likely to improve this year.
In a report, Ricafort said the deficit was driven by the trade gap, weather-related disruptions, and issues linked to flood control corruption.
“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/confidence on the country,” he said.
Ricafort said easing geopolitical risks in the Middle East, including tensions between Israel and Iran, would also support a recovery.
An improving BOP would bolster the country’s gross international reserves (GIR), which stood at $110.8 billion as of end-December, he said.
The BSP said the reserves are sufficient to cover 7.4 months of imports of goods and services, well above the international benchmark of three to four months.
Ricafort said GIR levels could rise further due to government foreign borrowings, steady overseas Filipino workers’ remittances, business process outsourcing receipts, export growth, and tourism earnings.
He said stronger BOP and GIR positions would support the peso, limit speculative pressures, and reinforce the country’s external position, helping sustain its investment-grade credit ratings.
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