US dollar reserves steady at $112.43 billion end-October
The Philippines’ stock of US dollars stood at $112.434 billion at the end of October, slightly lower than the previous month’s record high of $112.706 billion.
Based on Bangko Sentral ng Pilipinas (BSP) data, the current gross international reserves (GIR) are significantly higher than the $101.035 billion recorded at the same time last year, an increase of $11.399 billion.
The BSP attributed the minimal month-on-month decrease in GIR to the government’s net foreign currency withdrawals to pay for maturing loans and, in part, to cover its various expenditures.
At $112.434 billion, the central bank considers the US dollar reserves a "more than adequate external liquidity buffer." The GIR is considered adequate if it can finance at least three months' worth of the country’s imports of goods and payments for services and primary income.
At this level, the GIR is equivalent to 8.1 months’ worth of imports of goods and payments for services and primary income, and about 4.5 times the country’s short-term external debt based on residual maturity.
Meanwhile, the country’s net international reserves (NIR) dipped by $280 million to $112.39 billion during the period. The NIR is the difference between the BSP’s reserve assets (GIR) and reserve liabilities, or short-term foreign debt, credit, and loans from the International Monetary Fund (IMF).
The BSP’s reserve assets consist of foreign investments, gold, foreign exchange, reserve position in the IMF, and special drawing rights (SDRs), sometimes referred to as IMF currency.
At the end of October, BSP’s foreign investments amounted to $94.355 billion, up from $84.728 billion during the same period last year. However, this is lower than the $95.199 billion recorded at the end of September this year.
Gold reserves amounted to $11.353 billion during the period, higher than the $10.57 billion recorded at the same time in 2023 and the $10.859 billion at the end of September.
The BSP’s latest foreign exchange holdings also increased to $2.165 billion, compared to $1.236 billion last year and $2.041 billion at the end of September.
The reserve position in the IMF and SDRs totaled $683.9 million and $3.875 billion, respectively, compared to $774.1 million and $3.722 billion the previous year.
The BSP forecasts that GIR will close 2024 at around $104 billion and settle at $105 billion next year.
GIR is supported by foreign exchange inflows from remittances, earnings from the business process outsourcing sector, and foreign direct investments. Tourism revenues are also a steady source of US dollars for the Philippines.
Last year, the GIR amounted to $103.753 billion, compared to $96.149 billion in 2022.