The Philippines’ gross international reserves (GIR) dropped to $103.4 billion in January from $103.8 billion in December, the Bangko Sentral ng Pilipinas said Thursday.
The BSP said in a statement the latest GIR level represented a more than adequate external liquidity buffer equivalent to 7.7 months’ worth of imports of goods and payments of services and primary income.
“Moreover, it is also about 6.0 times the country’s short-term external debt based on original maturity and 3.9 times based on residual maturity,” the BSP said.
It said the month-on-month decline in the GIR level reflected mainly the national government’s (NG) payments of its foreign currency debt obligations and downward valuation adjustments in the BSP’s gold holdings due to the decrease in the price of gold in the international market.
The net international reserves, which refers to the difference between the BSP’s reserve assets and reserve liabilities, also decreased to $102.8 billion as of end-January 2024 from the end-December 2023 level of $103.7 billion.
“For the coming months, the country’s GIR could still be supported by the continued growth in the country’s structural inflows from OFW remittances, BPO revenues, exports, relatively fast recovery in foreign tourism revenues as well as continued foreign investment/FDI inflows coming from among pre-pandemic highs,” said Michael Ricafort, chief economist at Rizal Commercial Banking Corp.
Ricafort said the relatively high GIR at $103.4 billion could still strengthen the country’s external position, which is a key pillar for the country’s continued favorable credit ratings for the second straight year, mostly at one to three notches above the minimum investment grade, a sign of resilience despite the COVID-19 pandemic that caused downgrades in other countries around the world.