The Bangko Sentral ng Pilipinas’ (BSP) total foreign currency and deposits amounted to $3.63 billion in the first six months, down by 47.7 percent compared to same period last year of $6.94 billion.
Foreign currency reserves are convertible assets of the central bank. The BSP’s reserve assets include foreign investments, gold holdings, foreign exchange, reserve position in the International Monetary Fund (IMF), and special drawing rights. These reserve assets are all included in the gross international reserves’ (GIR) report released monthly by the BSP.
The GIR however does not disclose some of the BSP’s reserve assets such as currency and deposits abroad.
As of end-June, total currency and deposits to foreign institutions for example, totaled $2.09 billion. This is lower by 49.3 percent from same time last year of $4.12 billion.
Reserve assets held as currency and deposits in other central banks, the IMF and the Bank for International Settlements, also amounted to $1.536 billion during the period. This was 45.4 percent lower compared to $2.81 billion in 2022.
For the first half of 2023, other reserve assets held by the BSP totaled $11.78 billion, lower compared to $8.28 billion last year.
But of the end-June other reserve assets, $5.69 billion are not included in the official reserve assets.
These are also classified as BSP foreign currency and deposits. It includes financial derivatives, accrued interest receivables, financial securities purchased under agreements to resell, and placements in the BIS such as the BIS Investment Pools or BISIPs and the Asian Bond Fund.
As of end-August this year, the country’s GIR totaled $99.805 billion, lower than end-July’s $99.951 billion. The record-highest GIR level was $108.70 billion in December 2021.
At this level, the BSP said the GIR is still considered “more than adequate external liquidity buffer”.
It is equivalent to 7.4 months’ worth of imports of goods and payments of services and primary income and about 5.9 times the country’s short-term external debt based on original maturity and 4.1 times based on residual maturity.
A GIR is adequate if it can finance at least three-months’ worth of the country’s imports of goods and payments of services and primary income. It 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.
As of end-August, the BSP’s gold reserves amounted to $10.231 billion from $10.302 billion in the previous month. Its foreign investments mainly in securities and bonds totaled $84.33 billion versus $83.682 billion end-July.
The BSP’s reserve position in the IMF totaled $790 million while SDR holdings was at $3.805 billion.
Last year, the GIR reached $96.149 billion.