BSP foreign deposits down 53% in 2023

The Bangko Sentral ng Pilipinas (BSP) reported that its currency and deposits abroad totaled $2.206 billion only in 2023, down 53 percent compared to $4.698 billion in 2022.

BSP’s foreign currency and deposits are included in the country’s US dollar reserves or gross international reserves (GIR). As of end-December last year, the GIR stood at $103.753 billion, up from $96.249 billion in 2022.

Based on BSP data, currency and deposits in other foreign banks decreased by 53.75 percent to $1.876 billion versus $4.057 billion in 2022. These are banks identified by the BSP as “banks headquartered outside” of the Philippines.

Meanwhile, currency and deposits to other central banks, the International Monetary Fund (IMF) and Bank for International Settlements (BIS) also declined by 48.53 percent in 2023 to $329.77 million compared to $640.76 million in 2022.

BSP officials declined to comment or explain the currency and deposits under the country’s official reserve assets or currency dealings due to its confidential nature.

The data on total currency and deposits, while part of GIR, is not disclosed along with the GIR when the reserves data is released.

The central bank reports two GIR numbers in a single month, a preliminary and the final data which is reported along with the balance of payments.

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.

The latest report by the BSP showed that GIR as of January 2024 stood of $103.269 billion. Compared to same period in 2023, the GIR increased from $100.665 billion.

The GIR remains adequate as it is equivalent to 7.7 months’ worth of imports of goods and payments of services and primary income. It is also about six times the country’s short-term external debt based on original maturity as well as 3.9 times based on residual maturity.

As explained by the BSP, a 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. 

In addition, a country’s US dollar reserves is sufficient if it allows 100 percent cover for both public and private foreign liabilities that will mature within the next 12 months.