Philippine banks’ loan repayments slash foreign capital inflows

Financial account net inflows fell to $2.4b from $7.4b in the prior year.

Philippine banks repaying their foreign loans and overseas investors pulling deposits from local lenders heavily reduced foreign capital inflows during the first quarter of 2026. 

This banking sector movement, alongside climbing import costs, pulled the country’s overall balance of payments (BOP) deficit down to $5.3b, or 4.5% of gross domestic product (GDP). 

The deficit widened from the $3.0b gap, or 2.6% of GDP, recorded in the first quarter of 2025.  

Data from the Bangko Sentral ng Pilipinas (BSP) shows that net inflows in the financial account dropped from $7.4b down to $2.4b. 

This drop was led by the "other investments" category, which fell from a $6.4b inflow to a $1.4b inflow as local banks settled external debts and nonresidents withdrew their local bank currency and deposits.