The Philippines’ foreign exchange buffers are projected to enter a multi-year decline after hitting a peak in 2025, according to the International Monetary Fund (IMF), a shift in the country’s external liquidity position through the end of the decade.

Based on the Washington-based multilateral lender IMF’s forecast, the country’s reserves in December 2025 would be the lowest in four months, since August 2025’s $107.1 billion.

While last month’s close would be the peak since 2021’s $108.79 billion, the IMF expects this level to drop gradually to $106.5 billion in 2026, $105 billion in 2027, and $103.3 billion in 2028—a four-year falling streak.

Data from the Bangko Sentral ng Pilipinas (BSP) showed that the country’s GIR expanded to $111.1 billion at end-November, surpassing the one-year high in October at $110.2 billion.

Strongest since October 2024, the BSP said the sustained improvement until end-November could be attributed to higher global gold prices, despite the easing in the central bank’s earnings from its investments.

Gold reserves stood at $18 billion during the period, surpassing the all-time high in October and posting a new record level since 2000.

GIR includes the BSP’s reserve assets, such as foreign investments, gold, foreign currency, its reserve position in the IMF, and special drawing rights (SDR).

As per the central bank, the end-November reserve level provides a “robust” external liquidity buffer. It is enough to cover 7.4 months’ worth of imports and payments for services and income.

GIR serves as a country’s backup fund to finance imports and repay foreign debts, support the local currency, and protect against global economic shocks. The BSP said the most recent GIR is sufficient to cover short-term foreign debt by 3.8 times.

Rizal Commercial Bank Corp. chief economist Michael Ricafort said the projected reduction in reserves could reflect the country’s principal payments on foreign obligations in the coming years, even as most of them are long-term in nature.

Ricafort also said this could reflect trade deficits, but he sees them offset by sustained expansion in overseas Filipino worker (OFW) remittances, business process outsourcing (BPO) revenues, earnings from foreign tourism, and foreign investments.