THE country’s gross international reserves (GIR) fell for a third straight month to $106.84 billion in December, partly due to the Bangko Sentral ng Pilipinas (BSP) intervening in the foreign exchange market to stabilize the peso.
GIR dropped from $108.49 billion a month earlier and was nearly $6 billion lower than the 2024 peak of $112.71 billion seen in September.
It was also lower than the BSP’s projection that reserves would hit $109 billion by the end last year.
The decline, the central bank said, was mainly due to its net foreign exchange operations, the national government having tapped its deposits with the BSP to pay for foreign currency debts and lower gold prices that reduced the value of BSP gold holdings.
The amount is still more than sufficient as an external liquidity buffer, the central bank said, being equivalent to 7.5 months’ worth of imports of goods and payments of services and primary income.
It is also about 3.8 times the country’s short-term external debt based on residual maturity.
The central bank considers GIR adequate if “it can finance at least three months’ worth of the country’s imports of goods and payments of services and primary income.”
The level is also considered sufficient “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.”
Net international reserves, which comprise the difference between GIR and reserve liabilities, dropped to $106.83 billion from November’s $108.46 billion.
GIR consists of the BSP’s foreign investments, gold, foreign exchange, reserve position in the International Monetary Fund and special drawing rights.
Sought for comment, Rizal Commercial Banking Corp. chief economist Michael Ricafort said the decline was caused by reduced foreign investments due to global market uncertainty over potential protectionist measures by US President-elect Donald Trump.
He added that “some payment of foreign debt and other foreign obligations toward the end of the year” also weighed on the country’s reserves.
“For the coming months, continued growth in OFW (overseas Filipino worker) remittances, BPO (business process outsourcing) revenues, foreign tourism receipts, foreign investments would still support balance of payments and GIR data, going forward,” Ricafort said.
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