The country’s US dollar reserves reached $106.837 billion in 2024, short of the projected $109 billion for the year, according to the Bangko Sentral ng Pilipinas (BSP).
Referred to technically as gross international reserves (GIR), the GIR as of end-December is higher than end-2023’s $103.753 billion but lower than end-November’s $108.488 billion.
In a statement on Tuesday, Jan. 7, the BSP said the preliminary GIR is “more than adequate external liquidity buffer” and is equivalent to 7.5 months’ worth of imports of goods and payments of services and primary income. The GIR is viewed 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 at current level is also sufficient to cover 3.8 times of the Philippines’ short-term external debt based on residual maturity. A GIR is a buffer fund for the payment of both pubic and private foreign liabilities maturing within the immediate twelve-month period.
On a month-on-month basis, the GIR declined by $1.651 billion, mainly because of the following: BSP’s net foreign exchange operations; drawdown on the national government’s deposits with the BSP to pay off its foreign currency debt obligations; and lower valuation of gold holdings due to a drop in global gold prices.
On a year-on-year tally, the country’s foreign exchange (FX) assets and reserves increased by $3.084 billion.
Meanwhile, the net international reserves or the NIR fell by $1.633 billion to $106.825 billion as of end-December versus end-November of $108.458 billion. NIR is the difference between the BSP’s reserve assets which is the GIR, and reserve liabilities or the short-term foreign debt and credit and loans from the International Monetary Fund (IMF).
The BSP’s reserve assets are composed of foreign investments, gold holdings, FX holdings, reserve position in the IMF, and special drawing rights (SDRs) of the IMF.
At the end of 2024, BSP’s foreign investments amounted to $90.022 billion, down from $91.304 billion in end-November but higher than end-2023’s $87.854 billion.
Gold reserves reached $11.005 billion, slightly lower than the previous month’s $11.026 billion and from last year’s $10.557 billion.
The BSP’s FX holdings also declined to $1.373 billion end-December compared to $1.728 billion in end-November but more than the $770 million at the close of 2023.
As for the reserve position in the IMF and SDRs, this totaled $675 million and $3.760 billion, respectively, compared to the previous year’s $760 million and $3.809 billion.
The BSP forecasts GIR will close 2025 at the $110 billion level due to continued FX inflows such as from remittances, foreign direct investments, and earnings from the business process outsourcing and tourism sectors.
The GIR reached its record highest of $112.706 billion in September last year, breaking the previous record of $108.794 billion in 2021.