The Philippines’ gross international reserves (GIR) slightly dropped to $104.70 billion as of end-June 2024 from $105.02 billion in the previous month, the Bangko Sentral ng Pilipinas said over the weekend.
It traced the month-on-month decline in the GIR to the national government’s payments of foreign currency debt obligations and downward valuation adjustments in the BSP’s gold holdings.
The figure, however, was higher than the $99.4-billion reserve assets of the BSP registered in June 2023. The GIR consists of the BSP’s foreign investments, gold, foreign exchange, reserve position in the International Monetary Fund and special drawing rights which refer to supplementary foreign exchange reserve assets maintained by the IMF.
The BSP said the latest GIR represents an external liquidity buffer equivalent to 7.7 months’ worth of imports of goods, payments of services and primary income. GIR is deemed adequate if it can finance at least three-months’ worth of the country’s imports of goods and payments of services and primary income.
It was also about 6.1 times the country’s short-term external debt based on original maturity and 3.8 times based on residual maturity.
Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.
The level of GIR is considered adequate, if it provides at least 100-percent cover for the payment of the country’s foreign liabilities, public and private, falling due within the immediate twelve-month period.
Meanwhile, the net international reserves, or the difference between the BSP’s reserve assets (GIR) and reserve liabilities (short-term foreign debt and credit and loans from the International Monetary Fund (IMF), fell from the end-May 2024 level of $104.98 billion to $104.69 billion as of end-June 2024.
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