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Philippine balance-of-payments deficit widens to USD 3.14bn deficit in September as reserves fall to USD 99.5bn

Published Data as of PhilippinesMacro & households
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Key points

Implications for lenders

With reserves down to USD 99.5bn and 12 of 13 economists expecting a rate increase, Philippine lenders may want to stress-test funding costs and repricing on variable-rate and short-tenor loans. Affordability checks for borrowers whose costs track imported goods or the exchange rate can be tightened, since a weaker peso can raise their expenses.

Implications

ExecutivesExternal financing pressure adds to the case for a further BSP rate increase, so Philippine lenders may face higher funding costs into 2027, which can in turn weigh on borrowers' repayment capacity.
InvestorsA balance-of-payments deficit running ahead of the official projection and falling reserves raise the risk of peso weakness and tighter policy, which can weigh on bank and lender valuations and on dollar returns from peso assets.
OperatorsLenders with dollar-linked funding or imported-goods financing (vehicles, appliances, fuel-intensive SMEs) are most exposed to a weaker peso; pricing and affordability assumptions may need rechecking.

Facts

Balance of payments: the Bangko Sentral ng Pilipinas (BSP) data show a USD 3.14bn deficit in September 2026, after a USD 596m deficit in August 2026 and a USD 82m surplus in September 2025; the largest monthly deficit since January 2025. 1 For January–September the deficit was USD 9.09bn deficit, compared with a USD 5.32bn deficit in January–September 2025. 2 The BSP attributed the year-to-date deficit to the continued trade-in-goods gap and net outflows from foreign portfolio investment, partly offset by remittances, government foreign borrowing, services trade and foreign direct investment.

Reserves: gross international reserves were USD 99.5bn at end-September, down from USD 104.85bn at end-August and USD 109.06bn a year earlier; lowest since September 2023. 3 They covered 6.2 months of imports of goods and payments for services and primary income, down from 6.8 months at end-August, 4 and 3.1 times short-term external debt on a residual-maturity basis. 5 The BSP said the September decline mainly reflected its net foreign exchange operations, lower valuations of gold and foreign-currency assets, and government payments of external debt.

Policy: the BSP's overnight reverse repurchase rate stands at 5.0%. 6 In a Philstar poll published on 19 October, 12 of 13 economists expected a rate increase at the Monetary Board meeting on 22 October. 7

Analysis

Time series: the nine-month deficit of USD 9.09bn deficit already exceeds the full-year 2025 USD 5.7bn deficit 8 and sits just below the BSP's 2026 projection of USD 9.2bn deficit, 9 which the BSP had lowered only on 13 October. Any fourth-quarter deficit beyond that small remaining gap would take the full-year outcome past the projection. Reserves are now below the BSP's end-2026 projection of USD 104bn, 10 after USD 104.8bn at end-August. 11

Region: Indonesia's official reserves were USD 146.3bn at end-September, down from USD 146.5bn at end-August, 12 equal to 5.3 months of imports. 13 The Philippine import cover of 6.2 months is higher, but the two central banks use different import bases (the BSP includes services and primary income payments), so the levels are not directly comparable. The difference is in the direction: Indonesia's reserves were broadly stable in September, while Philippine reserves fell sharply in one month.

Counterpoints and uncertainties

Monthly balance-of-payments figures are volatile and preliminary; a single large outflow month can reverse, and part of the reserve fall reflects valuation changes and debt payments rather than intervention. Remittances, government foreign borrowing and foreign direct investment still provide inflows. The poll shows expectations, not a decision; the Monetary Board could hold or move by a different amount on 22 October.

Key figures

  1. Balance of payments, September 2026: USD 3.14bn deficit (after a USD 596m deficit in August 2026 and a USD 82m surplus in September 2025; the largest monthly deficit since January 2025)
    Figures as reported from the BSP release; BSP data are preliminary and may be revised.
    . Overall balance of payments position, month (BSP, preliminary). Philippines. Basis date: 30 Sep 2026. Source: Philstar: BOP deficit swells to $3.14 billion in September (2026-10-20), reporting BSP data
  2. Balance of payments, January–September 2026: USD 9.09bn deficit (compared with a USD 5.32bn deficit in January–September 2025)
    Figures as reported from the BSP release; BSP data are preliminary and may be revised.
    . Overall balance of payments position, year to date (BSP, preliminary). Philippines. Basis date: 30 Sep 2026. Source: Philstar: BOP deficit swells to $3.14 billion in September (2026-10-20), reporting BSP data
  3. Gross international reserves: USD 99.5bn (down from USD 104.85bn at end-August and USD 109.06bn a year earlier; lowest since September 2023)
    Figures as reported from the BSP release; BSP data are preliminary and may be revised.
    . Gross international reserves, end of month (preliminary). Bangko Sentral ng Pilipinas. Basis date: 30 Sep 2026. Source: Philstar: BOP deficit swells to $3.14 billion in September (2026-10-20), reporting BSP data
  4. Reserves in months of imports: 6.2 months (down from 6.8 months at end-August)
    Figures as reported from the BSP release; BSP data are preliminary and may be revised.
    . Months of imports of goods and payments for services and primary income. Bangko Sentral ng Pilipinas. Basis date: 30 Sep 2026. Source: Philstar: BOP deficit swells to $3.14 billion in September (2026-10-20), reporting BSP data
  5. Reserves cover of short-term external debt: 3.1 times
    Figures as reported from the BSP release; BSP data are preliminary and may be revised.
    . Gross international reserves divided by short-term external debt on a residual-maturity basis. Bangko Sentral ng Pilipinas. Basis date: 30 Sep 2026. Source: Daily Tribune: GIR falls to $99.5 billion, BoP deficit nears forecast (2026-10-19), reporting BSP data
  6. BSP policy rate (as reported): 5.0% (unchanged since the 28 August 2026 increase from 4.75%). BSP overnight reverse repurchase rate as cited in press coverage. Philippines, national. Basis date: 9 Sep 2026. Source: Inquirer: Bad loans up amid continuing consumer strain (2026-09-09)
  7. Economists expecting a BSP rate hike on 22 October: 12 of 13. Economists in a Philstar poll expecting an increase at the 22 October 2026 Monetary Board meeting (most 25bp; two 50bp). Philippines. Basis date: 19 Oct 2026. Source: Philstar: Poll: Another hike in BSP rates looms (2026-10-19)
  8. Balance of payments, 2025: USD 5.7bn deficit (reversing a USD 609m surplus in 2024). Overall balance of payments, calendar year (BSP). Philippines. Basis date: 31 Dec 2025. Source: The Manila Times: BOP to stay in deficit through 2027, says BSP (2026-10-14)
  9. BSP projected balance of payments, 2026: USD 9.2bn deficit (narrower than the USD 10.7bn deficit in the previous projection). Overall balance of payments projected by BSP for calendar 2026 (October 2026 projections). Philippines, BSP projection. Basis date: 13 Oct 2026. Source: The Manila Times: BOP to stay in deficit through 2027, says BSP (2026-10-14)
  10. BSP projected gross international reserves, end-2026: USD 104bn. Gross international reserves projected by BSP for end-2026. Philippines, BSP projection. Basis date: 13 Oct 2026. Source: The Manila Times: BOP to stay in deficit through 2027, says BSP (2026-10-14)
  11. Gross international reserves: USD 104.8bn (USD 103.3bn at end-July)
    The BSP release could not be read directly.
    . Gross international reserves, end of month (preliminary). Bangko Sentral ng Pilipinas. Basis date: 31 Aug 2026. Source: Philstar (2026-09-09), reporting BSP data
  12. Official reserve assets: USD 146.3bn (down from USD 146.5bn at end-August). Official reserve assets, end of month. Bank Indonesia. Basis date: 30 Sep 2026. Source: Bank Indonesia news release: Cadangan Devisa September 2026 Tetap Terjaga (2026-10-07)
  13. Reserves in months of imports: 5.3 months (down from 5.4 months at end-August)
    5.2 months including government external debt service.
    . Official reserve assets in months of imports. Bank Indonesia. Basis date: 30 Sep 2026. Source: Bank Indonesia news release: Cadangan Devisa September 2026 Tetap Terjaga (2026-10-07)

Sources

  1. Bangko Sentral ng Pilipinas: Balance of Payments (statistics and reports)primary
  2. Bank Indonesia news release: Cadangan Devisa September 2026 Tetap Terjaga (2026-10-07)primary
  3. Philstar: BOP deficit swells to $3.14 billion in September (2026-10-20), reporting BSP data
  4. The Manila Times: BOP deficit hits $3.14B in Sept, widens to near 2-year high (2026-10-20), reporting BSP data
  5. Daily Tribune: GIR falls to $99.5 billion, BoP deficit nears forecast (2026-10-19), reporting BSP data
  6. Philstar: Poll: Another hike in BSP rates looms (2026-10-19)
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A Japanese version of this article is available: 日本語版

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