The country’s US dollar reserves held by the central bank remained steady at $108.45 billion in January although slightly down by $340 million from $108.79 billion in December 2021 after the National Government (NG) paid its maturing loans last month.
The Bangko Sentral ng Pilipinas (BSP) said the month-on-month decline in the gross international reserves (GIR) was due mainly to NG payments of its foreign currency debt obligations. The lower gold holdings because of the decrease in the price of gold in the international market also contributed to the GIR decline.
The January reserves is also $220 million lower compared to same period in 2020 of $108.67 billion.
The GIR ended 2021 at $108.79 billion which was $1.33 billion lower from what was reported at end-2020 of $110.12 billion. For the rest of 2021, the US dollar reserves was below $110 billion.
The BSP said the latest GIR level is still “more than adequate external liquidity buffer”. It is equivalent to 10.3 months’ worth of imports of goods and payments of services and primary income.
At this level, the GIR is also about 8.6 times the country’s short-term external debt based on original maturity and 5.9 times based on residual maturity, said the BSP.
The net international reserves, which refers to the difference between the BSP’s reserve assets in the GIR and reserve liabilities or short-term foreign debt and credit and loans from the International Monetary Fund (IMF), have the same computation which also decreased by $340 million to $108.45 billion from $108.79 billion.
The BSP’s reserve assets are composed of foreign investments, gold, foreign exchange, reserve position in the IMF, and special drawing rights (SDR).
In January, the BSP-managed foreign investments amounted to $93.74 billion, up from $91.62 billion in December 2021, and from $92.38 billion same period in 2020.
Meantime, gold holdings fell to $9.18 billion in January from $9.33 billion in December and from $10.69 billion same time in 2020.
The SDR portion of the GIR amounted to almost $4 billion which was higher than same period in 2020 of $1.23 billion after the IMF transferred $2.78 billion to the BSP in August last year. The additional SDRs issued by the IMF was part of the $650 billion global liquidity assistance.
The Philippines’ reserve position in the IMF is currently at $800.7 million, lower compared to same period in 2020 of $813.4 million.
The BSP expects GIR to increase to as much as $112 billion by end-2022 with the sustained economic recovery, both local and global.