GIR slips to $108.8B in January

Published February 15, 2021, 7:45 PM

by Lee C. Chipongian

The Bangko Sentral ng Pilipinas (BSP) reported Monday that gross international reserves (GIR) dipped to $108.799 billion in January from December 2020’s $110.117 billion due to government withdrawals to pay for foreign-denominated loans, and changes in the price of gold.

The BSP in a statement said GIR level remains “adequate external liquidity buffer” to “help cushion the domestic economy against external shocks.” The pandemic-hit economy is expected to bounce back in 2021 but will fully recover and resume pre-COVID 19 levels by 2022.

“The month-on-month decrease in the GIR level reflected outflows mainly from the foreign currency withdrawals of the National Government from its deposits in the BSP to pay its foreign currency debt obligations and revaluation adjustments from the BSP’s gold holdings due to the decrease in the price of gold in the international market. These outflows were partly offset, however, by the inflows from the BSP’s foreign exchange operations and income from its investments abroad,” said the BSP.

The current GIR is $26.312 billion more than same time in 2019. It is worth 11.6 months’ worth of imports of goods and payments of services and primary income, and about 9.4 times the country’s short-term external debt based on original maturity and 5.1 times based on residual maturity, according to the BSP.

The GIR is composed of foreign assets of the BSP invested in foreign-issued securities, monetary gold, and foreign exchange. In January, BSP’s foreign investments amounted to $92.527 billion, down from December 2020’s $93.644 billion. Gold reserves also fell to $10.692 billion from $11.605 billion. 

The GIR also has BSP’s foreign exchange holdings of $3.352 billion, up from the previous month’s $2.821 billion.