PH dollar deficit swells to over 1-year high 

MANILA, Philippines — The country’s dollar deficit swelled to its widest in more than a year in September, as renewed tensions between the United States and Iran pushed import costs higher and weighed on investor flows.

Latest data from the Bangko Sentral ng Pilipinas (BSP) showed that the country’s balance of payments (BOP) posted a $3.14-billion deficit in September, the largest shortfall since the $4-billion gap recorded in January 2025.

READ: PH dollar deficit seen narrowing as exports gain

This means more foreign currency flowed out of the country than entered it during the month.

The deficit widened sharply from the $596-million shortfall in August and reversed the $82-million surplus recorded in September last year.

It likewise brought the BOP position as of end-September to a $9.08-billion deficit, nearly reaching the BSP’s $9.2-billion full-year projection, equivalent to 1.8 percent of gross domestic product.

As it is, the central bank had trimmed its full-year deficit forecast from an earlier projection of $10.7 billion in hopes of the global artificial intelligence boom fueling exports and foreign exchange inflows.

Carlo Asuncion, chief economist at Union Bank of the Philippines, said the likelihood of the country posting a full-year BOP surplus is now “extremely low” as global uncertainty persists.

“The deficit was likely driven by a wider trade gap, higher import and debt-service payments, and softer capital flows amid persistent global uncertainty,” Asuncion said.

“That said, we do not view the latest outturn as a sign of fundamental external-sector weakness, as structural foreign exchange inflows from remittances, BPO revenues, and tourism continue to provide support to the country’s external position,” he added.

READ: Spending ramp-up swells Aug budget deficit to P161.3B

Consequently, the country’s gross international reserves, or foreign assets that serve as a buffer against external shocks, fell to a three-year low of $99.5 billion in September. This was 5 percent lower than the $104.8 billion recorded in the previous month.

Still, the reserve level remained sufficient to cover 6.2 months’ worth of imports of goods and payments of services and primary income. It can also service about 3.2 times the country’s short-term external debt based on residual maturity. INQ