Philippines' CAD surges to $4.25B in Q1 2025

The Philippines' current account deficit (CAD) surged to $4.25 billion in the first quarter of 2025, more than doubling from the same period last year.

This deficit reflects a widening merchandise trade gap and reduced net revenues from trade in services due to lower transport service earnings and increased outbound travel spending.

Despite these challenges, higher remittances from overseas Filipino workers provided some stability; cash remittances rose by 2.7% to $8.44 billion in the first quarter.

The Bangko Sentral ng Pilipinas (BSP) expects the CAD to reach $19.8 billion or -3.9% of GDP for the full year, driven primarily by persistent trade deficits and uncertainties related to global crude oil prices and US tariff policies.

Analysts warn that if oil prices remain high or the peso weakens further, the current account deficit could widen in the short term, potentially straining foreign exchange reserves unless offset by stable financing inflows like foreign direct investments.