The country's balance of payments, which reflects the difference between money sent into and out of the country, recorded a deficit of US$2.6 billion in the second quarter of 2025, amid rising global uncertainty. This is a reversal from the US$1.2 billion surplus in the same period last year.
The BOP position consists of the current account, which mainly covers trade, and the financial account, which includes investments and loans. It also includes the capital account (including grants and other one-time transfers), which is smaller than the first two.
This shift to a deficit was mainly due to lower net inflows into the financial account as local banks lent more to overseas borrowers and settled some foreign obligations, as recorded in the other investment account.
Declines in portfolio and direct investment net inflows also weighed on the financial account as global financial uncertainty prompted investors to take a more cautious stance.
The current account deficit, on the other hand, narrowed during the quarter, supported by increased trade in goods. The current account includes the flow of goods, services, income, and current transfers between residents and nonresidents.
For the first half of 2025, the BOP registered a US$5.6 billion deficit, reversing the US$1.4 1.4-billion surplus recorded in January to June 2024. The decline was mainly due to lower net financial account inflows and a wider current account deficit.
Financial account net inflows declined as portfolio investment moderated, largely due to residents’ investments in foreign debt securities. Net inflows of other investments declined as banks extended more loans to nonresidents.
The current account posted a larger deficit as the trade in goods gap widened, driven by higher imports amid strong domestic demand and sustained economic growth.
Lower net receipts from trade in services further deepened the shortfall. PR