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Manila Bulletin devider Business devider Banking & Finance devider Philippine forex buffer shrinks to 17-month low despite global gold price rally

Philippine forex buffer shrinks to 17-month low despite global gold price rally

Published Aug 7, 2026 03:17 pm
Despite a rebound in gold prices, the Philippines’ gross international reserves (GIR) dropped to a 17-month low of $103.4 billion in July, weighed down by central bank operations and government debt payments.
Preliminary data released by the Bangko Sentral ng Pilipinas (BSP) on Friday, Aug. 7, showed that the country’s United States (US) dollar stock fell from $104.74 billion in June.
This is the lowest level since January 2025, when reserves stood at $103.27 billion, and sits well below the record high of $113.3 billion set in February 2026.
According to the BSP, the month-on-month decline was “mainly driven” by the central bank’s net foreign exchange operations, alongside the National Government’s (NG) drawdowns from its deposits with the BSP to pay external debt obligations.
The drop occurred despite a recovery in the BSP’s gold holdings, which rose to $17.49 billion in July from an eight-month low of $17.19 billion in June.
The rebound was driven by upward valuation adjustments as international gold prices climbed. Additional gains stemmed from the BSP’s net income on overseas investments.
Meanwhile, foreign investments in debt papers dropped sharply to $67.26 billion in July from $72.04 billion in June, while foreign currency and deposits edged down to $1.85 billion from $2.29 billion.
Despite the contraction, the BSP maintained that the reserve stockpile remains “adequate” and continues to provide a strong buffer against external shocks.
The end-July GIR is sufficient to cover 6.7 months’ worth of imports of goods and payments of services and primary income, down slightly from 6.8 months in June.
Additionally, the reserves can cover the country’s short-term external debt 3.6 times based on residual maturity, compared to 3.7 times the previous month.
GIR consists of foreign-denominated securities, gold, special drawing rights (SDRs), foreign exchange, and the country's reserve position in the International Monetary Fund (IMF).
These assets are vital for maintaining local currency stability and ensuring the nation can meet its foreign obligations. (Derco Rosal)

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Bangko Sentral ng Pilipinas (BSP) Gross international reserves (GIR)
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