The country’s balance of payments (BOP), which summarizes the country’s economic transactions with the rest of the world, registered a deficit of $5.3 billion (equivalent to 4.5 percent of GDP) in the first quarter of 2026, wider than the $3 billion deficit (equivalent to 2.6 percent of GDP) recorded in the first quarter of 2025.

The latest BOP position reflected weaker financial inflows mainly due to external debt repayments and subdued foreign direct investment (FDI), alongside higher import costs that widened the current account deficit.

The decline in financial account net inflows was driven mainly by lower net inflows in other investments, as banks repaid their foreign loans and non-residents withdrew their currency and deposits from local banks. Direct investments continued to post net inflows but moderated, amid cautious investor sentiment.

Net portfolio investment outflows also eased as residents reduced their investments in foreign debt securities. However, this was partly offset by foreign investors’ withdrawals from Philippine debt securities.

Meanwhile, the current account deficit widened due to a larger trade in goods deficit, along with softer dividend inflows and reduced interest earnings from direct investments and reserve assets.

Similarly, the trade in services surplus narrowed as services payments, driven mainly by technical, trade-related, and other business services, and travel-related expenditures, grew faster than services receipts.

Exports of goods recorded robust growth, supported by sustained global demand for electronics, but were outweighed by high imports payments mainly due to price increases in key commodities.

The services sector continued to provide support through solid revenues from tourism, manufacturing services, and business process outsourcing (BPO).

Remittances from overseas Filipinos also remained resilient, helping cushion external pressures and providing a stable source of financing. Bangko Sentral ng Pilipinas