The country’s gross international reserves fell $2.77 billion in September to hit a seven-year low of $75.16 billion, as the Bangko Sentral ng Pilipinas moved to temper the depreciation of the peso against the US dollar.
“The month-on-month decline in the GIR level was due mainly to outflows arising from the foreign exchange operations of the BSP, payments made by the national government for its maturing foreign exchange obligations, and revaluation adjustments on the BSP’s gold holdings resulting from the decrease in the price of gold in the international market,” Bangko Sentral ng Pilipinas deputy governor Diwa Guinigundo said over the weekend.
Data showed the September reserves fell from $77.93 billion in August and represented the lowest level in more than seven year, or since they reached $71.883 billion in July 2011.
Guinigundo said at $75.17 billion, the reserves remained as an ample external liquidity buffer and equivalent to 6.8 months’ worth of imports of goods and payments of services and primary income.
They were also equivalent to 5.9 times the country’s short-term external debt based on original maturity and 4.2 times based on residual maturity.
“However, the decline in the GIR level was partially tempered by the NG’s net foreign currency deposits,” he said.
Net international reserves, which refer to the difference between the GIR and total short-term liabilities, also decreased by $2.77 billion to $75.15 billion as of end-September 2018, from the end-August 2018 level of $77.92 billion.
The Bangko Sentral was looking at a yearend reserve level of $80 billion, lower than the $81.5-billion level posted in 2017.
Bangko Sentral said the reserves level by yearend would be consistent with the revised balance of payments projection of $1.5-billion deficit from an earlier projection of $1-billion surplus.
It said the updated BOP projection incorporated the latest available data and reflected recent and prospective economic developments, both domestic and global. The current account is seen to post a higher deficit of $3.1 billion this year, or equivalent to 0.9 percent of gross domestic product.
“This mainly reflects the projected wider trade deficit as growth in goods imports largely outpaces exports growth,” the BSP said.
Reserves hit an all-time high of $86.139 billion in September 2016.