The Philippines’ gross international reserves (GIR) slipped to US$103.3 billion at the end of July 2026, while the country posted a US$1.5-billion balance of payments (BOP) deficit for the month, according to the Bangko Sentral ng Pilipinas (BSP).
The latest GIR level was down from US$104.7 billion at the end of June, reflecting a US$1.4-billion month-on-month decline.
Despite the drop, the BSP said the country’s foreign exchange reserves remained sufficient to meet its external financing needs and provide a buffer against external economic shocks.
At US$103.3 billion, the reserves were equivalent to 6.7 months of imports of goods and payments of services and primary income. The level was also enough to cover about 3.7 times the country’s short-term external debt based on residual maturity.
The decline in reserves was mainly driven by the BSP’s net foreign exchange operations, as well as the National Government’s drawdowns on its foreign currency deposits with the central bank to service external debt.
Downward valuation adjustments on the BSP’s foreign currency-denominated reserve assets and the National Government’s net foreign currency withdrawals from its BSP deposits also contributed to the decline.
These were partly offset by income from the BSP’s investments abroad and upward valuation adjustments on the central bank’s gold holdings following the increase in international gold prices.
BOP remains in deficit
IMAGE CREDIT: Alamy
Meanwhile, the country’s overall BOP position recorded a US$1.5-billion deficit in July, bringing the cumulative deficit for the first seven months of 2026 to US$5.3 billion.
Despite remaining in negative territory, the January-to-July deficit was narrower than the US$5.8-billion deficit recorded during the same period in 2025.
The BOP tracks the Philippines’ transactions with the rest of the world, including trade, investments, remittances and other cross-border financial flows.
The year-to-date deficit reflected the continued trade-in-goods gap and net outflows from foreign portfolio investments, according to the BSP.
These outflows were partly cushioned by sustained net inflows from personal remittances of overseas Filipinos, foreign borrowings by the National Government, trade in services and foreign direct investments.
The combination of still-substantial reserves and a narrower year-to-date BOP deficit provides some external-sector cushion for the Philippine economy, even as the country continues to contend with trade imbalances and movements in global capital flows.
For the Philippines, the latest figures highlight the role of the country’s foreign exchange reserves not only as a measure of external financial strength but also as a buffer against volatility in global markets.
The BSP’s end-July GIR figures include eligible foreign assets such as securities, currency and deposits, gold, reserve positions in the International Monetary Fund, special drawing rights and other reserve assets held by the central bank.
