PH reserves down to $101.98 B in June

Published July 7, 2022, 4:34 PM

by Lee C. Chipongian

PH reserves down to $101.98 B in June


The country’s hoard of US dollars fell to $101.98 billion at the end of June, $1.66 billion or 1.6 percent lower than the $103.65 billion in end-May as government used the foreign currency to pay past debts.

Based on data from the Bangko Sentral ng Pilipinas (BSP), the latest gross international reserves (GIR) have lost $3.78 billion or 3.6 percent when compared to same period last year of $105.76 billion.

US dollar/Manila Bulletin file photo

From the GIR’s highest level of $110.18 billion in December 2020, the country’s reserves have declined by $8.13 billion or 7.38 percent due to payments of US dollar-denominated foreign obligations.

The BSP on Thursday, July 7, said the latest GIR is still “more than adequate external liquidity buffer”. It is equivalent to 8.5 months’ worth of imports of goods and payments of services and primary income. It is also about 7.3 times the country’s short-term external debt based on original maturity and 4.6 times based on residual maturity. GIR is considered adequate if it can finance at least three-months’ worth of the country’s imports of goods and payments of services and primary income.

Besides payment of foreign currency debt obligations, the BSP said the GIR fell because the value of its gold holdings decreased as the price of gold in the international market also dropped during the period.

As of end-June, BSP’s gold reserves amounted to $8.94 billion, down from end-May’s $9.03 billion and but it was higher than same period last year of $8.87 billion.

Besides gold holdings, the BSP’s reserve assets are composed of foreign investments, foreign exchange (FX), reserve position in the International Monetary Fund (IMF) and special drawing rights (SDR).

As of end-June, under GIR, foreign investments totaled $85.66 billion, down from $87.95 billion in the previous month, while FX reserves rose to $2.83 billion from $2 billion in end-May.

The IMF reserves in SDR remains at $3.783 billion as of end-June. It was in August of last year when the BSP received fresh SDR liquidity from the IMF amounting to $2.78 billion.

For this year, the BSP has downgraded its GIR forecast to $105 billion from its earlier estimate of $108 billion. At the current level though, the GIR is now lower than the country’s outstanding external debt debt of $107.3 billion as of end-March.