A double-digit decline in the previously record-high gold reserves, coupled with falling foreign investments, drove the Philippines’ gross international reserves (GIR)—the country’s stock of foreign currencies and other assets—to its lowest level in more than half a year last month.

GIR stood at $107.51 billion by the end of the first quarter, the thinnest in seven months since August 2025’s $107.1 billion. This retreated from the record highs set during the first two months of the year.

The latest preliminary data from the Bangko Sentral ng Pilipinas (BSP) released on Tuesday night, April 7, showed GIR dropped from the $113.26 billion recorded in February. This decline follows a strong start to 2026, when reserves had peaked and surpassed the previous record of $112.71 billion.

Data indicate that a significant contributor to this change was the dip in gold reserves, which fell 12.5 percent to $20.18 billion in March. This is a decrease from the record $23.06 billion held in February, though it remains notably higher than the $18.58 billion recorded at the close of 2025.

SM Investments Corp. (SMIC) group economist Robert Dan Roces said this retreat was driven by recent foreign exchange (forex) intervention by the BSP, debt payments, and a strong United States (US) dollar revaluation. The BSP defended the oil-vulnerable peso from falling further against the greenback as the local currency hit record-low levels these past two months amid the conflict in Iran.

For Michael Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), this decline was mainly due to “lower foreign investments due to market volatility that reflected the adverse effects of the war in the Middle East.”

Foreign investments decreased by 3.9 percent to $80.9 billion in March from $84.2 billion last February.

Roces noted that the current reserves level remains ample and is performing its function as a buffer against external shocks, especially as the Philippines, as a net oil importer, stands vulnerable to supply disruptions.

His view echoed the central bank’s assessment that the March reserve level continues to provide a “robust” external liquidity buffer, despite some easing.

It is currently sufficient to cover 7.1 months’ worth of imports of goods and payments for services and primary income, down from the 7.5 months’ cover reported in February.

Further, the BSP stated that the current GIR is enough to cover the country’s short-term external debt 3.9 times based on residual maturity. This represents a decline from the 4.3-times cover maintained throughout the first two months of the year.

GIR is composed of the BSP’s reserve assets, including foreign-denominated securities, gold, forex, special drawing rights (SDRs), and reserve position in the Washington-based multilateral lender International Monetary Fund (IMF).

These reserves serve as a critical buffer against external economic shocks, supporting the local currency and ensuring the country can meet its international obligations.

Roces said the market should anticipate some volatility in the reserves, but he sees the level remaining “sound and should stabilize as inflows recover.”