Dollar reserves total $108.89-B in 2021

Published January 13, 2022, 3:05 PM

by Lee C. Chipongian

Philippines’ stock of US dollars or its gross international reserves (GIR) ended 2021 with $108.89 billion, down by 1.17 percent or by $1.23 billion compared to end-2020’s $110.12 billion, according to the Bangko Sentral ng Pilpinas (BSP).

BSP’s preliminary data indicated that the GIR level continues to be “more than adequate external liquidity buffer” for the country since it is equivalent to 10.3 months’ worth of imports of goods and payments of services and primary income. Generally, three months worth of the country’s imports of goods and payments of services and primary income is considered enough.

The latest GIR is also 8.8 times the country’s short-term external debt based on original maturity and 5.9 times based on residual maturity.

The BSP’s reserve assets consist of foreign investments, gold, foreign exchange, reserve position in the International Monetary Fund (IMF), and special drawing rights (SDRs).

As of end-December, BSP’s foreign investments amounted to $91.75 billion, lower than what was reported same period in 2020 of $93.64 billion. Gold reserves totaled $9.33 billion, also down from the previous year’s $11.60 billion.

The end-December 2021 GIR of $108.89 billion is higher than end-November 2021’s $107.72 billion.

The BSP said the National Government’s net foreign currency deposits with the BSP increased the GIR for December. The “upward adjustment in the value of the BSP’s gold holdings due to the increase in the price of gold in the international market” also contributed to the month-on-month improvement.

The BSP has recently revised lower its 2022 GIR projection of $115 billion to just $112 billion.

Last August 2021, the BSP received fresh SDR liquidity from the IMF amounting to $2.78 billion.

The credit raised the SDR reserves to $3.99 billion. The amount was the Philippines’ share of the $650 billion additional SDRs issued by the IMF as global liquidity assistance.

Before the fresh SDR allocation, the GIR has an existing SDR component of $1.22 billion which was first distributed to the Philippines in 2009 as funding support during the Global Financial Crisis.