The country’s US dollar stock as recorded under the central bank’s gross international reserves (GIR) increased to $101.303 billion as of end-November, up by $268 million compared to the previous month’s $101.035 billion.
Based on Bangko Sentral ng Pilipinas’ (BSP) preliminary data, the current GIR is significantly higher by $6.18 billion from same period last year of $95.123 billion.
The end-November GIR is the fourth highest reserves’ level in 2023, with the peak so far at $101.76 billion in April.
Some of the month-on-month increase in the GIR level worth $268 million came from the adjusted valuation of its gold holdings with the increase in the price of gold in the global market. The BSP’s net income from its investments abroad also contributed to the GIR increase.
Meanwhile, the net international reserves (NIR) or the difference between the BSP’s reserve assets which is the GIR and its reserve liabilities rose to $100.5 billion as of end-November compared to $100.3 billion in end-October. The NIR shows BSP’s short-term foreign debt and credit and loans from the International Monetary Fund (IMF).
“The latest GIR level represents a more than adequate external liquidity buffer,” said the BSP. The current level is equivalent to 7.5 months’ worth of imports of goods and payments of services and primary income. It is also about 5.8 times the country’s short-term external debt based on original maturity and 3.6 times based on residual maturity.
The BSP’s reserve assets are composed of gold, foreign investments, foreign exchange, reserve position in the IMF, and special drawing rights or SDRs in the IMF.
As of end-November, the BSP’s gold reserves amounted to $10.816 billion from $10.570 billion in the previous month. It is also higher from $8.96 billion same period last year.
BSP’s foreign investments mainly in securities and bonds totaled $84.092 billion during the period, up from $84.788 billion end-October, and from $80.287 billion end-November 2022.
The amount of foreign exchange held by BSP amounted to $1.876 billion as recorded in the GIR. This was more than the $1.236 billion in the previous tally and from $1.414 billion same time last year.
The BSP’s reserve position in the IMF totalled $787 million from $777 million previously and $754 million in 2022. SDR holdings remain at $3.73 billion as of end-November.
For this year, the BSP expects GIR will end at a conservative number of $99.5 billion but is projected to improve to $102 billion in 2024.
Last year, GIR amounted to $96.149 billion, down from $108.794 billion in 2021 which was the highest GIR level on record.
Basically, the BSP considers a GIR as adequate if it can finance at least three-months’ worth of the country’s imports of goods and payments of services and primary income.
The GIR is also viewed as more than sufficient if it provides 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, said the BSP.
The Philippines sources its foreign exchange from exports, remittances from overseas Filipinos, revenues from the IT-BPO and the tourism sectors.
Other US dollar sources are foreign direct investments, portfolio foreign investments, government offshore borrowings and loans from multilateral agencies such as the Asian Development Bank and the World Bank, among others.