PH dollar reserves drop to $93.95 B end-Nov
The country’s US dollar reserves fell back to $93.95 billion as of end-November, lower than $94.02 billion in the previous month, reported the Bangko Sentral ng Pilipinas (BSP).
The decline was largely to payments by the National Government on some of its foreign currency debts during the period, and withdrawal from the BSP-supervised gross international reserves (GIR). Another contributing factor is the BSP’s net foreign exchange operations.
The lowest GIR level for 2022, so far, was recorded at $93 billion in September.
At $93.95 billion, the GIR is equivalent to 7.5 months’ worth of imports of goods and payments of services and primary income. It is also 6.9 times of the country’s short-term external debt based on original maturity and 4.2 times based on residual maturity.
“The latest GIR level represents a more than adequate external liquidity buffer for the Philippines," said the BSP.
A GIR should be able to finance at least three-months’ worth of imports of goods and payments of services and primary income. The BSP said the level of GIR should also provide 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.
The net international reserves, which is the difference between the BSP’s reserve assets and reserve liabilities, declined to $93.93 billion last month from $93.99 billion in October.
The BSP’s reserve assets are composed of foreign investments, gold, foreign exchange, reserve position in the International Monetary Fund (IMF) and special drawing rights.
As of end-November, foreign investments under the GIR amounted to $79.29 billion, down from $79.96 billion previously. The country’s gold reserves, meantime, increased to $8.96 billion from $8.27 billion.
The foreign exchange component of the GIR totalled $1.32 billion, down from $1.43 billion previously.
Because of US dollar selling to smoothen exchange rate volatilities in past months due to the strength of the greenback, the GIR has lost $14.84 billion since end-December 2021’s $108.79 billion. The peso vis-à-vis the US dollar has depreciated to a record low of P59 last Sept. 29. The local currency has devalued by P8.01 from the Dec. 31, 2021 rate of P50.99.
The current GIR estimates for end-2022 is $99 billion but this will be revised this week.
BSP Governor Felipe M. Medalla said the GIR will stay above $90 billion.
The IMF in a recent report noted that reserves will likely close at $94.1 billion this year. For 2023 and 2024, the IMF sees the GIR declining to $88.7 billion and $83.9 billion, respectively.