Bangko Sentral ng Pilipinas Governor Benjamin Diokno said Wednesday special drawing rights allocation of 1.958 billion, equivalent to $2.777 billion, from the International Monetary Fund will boost the country’s gross international reserves and reduce reliance on debt.
Data from the IMF website showed that member countries were allocated SDRs—the fund’s unit of exchange backed by dollars, euros, yen, sterling and yuan—in proportion to their quota shares in the IMF. The SDR valuation is calculated daily and stood at $1.41847 each as of Aug. 23.
The Philippines previously had 837.964 million in SDR allocation with the Fund, bringing the cumulative total to 2.795 billion.
“The BSP supports the IMF SDR allocation which will provide additional liquidity to member countries particularly during this period as efforts are exerted to address the COVID-19 crisis,” Diokno said in a statement.
“We confirm that the Philippines’ share in the SDR allocation amounting to SDR1,958,027,771.00 was credited to the country’s SDR account on Aug. 23, 2021. We expect this to result in an increase in the country’s gross international reserves,” Diokno said.
The IMF advised member country authorities that the SDR allocation could be used to boost foreign exchange reserves and reduce reliance on debt, create space for countries to step up effort against the crisis and support reforms to the economy.
IMF member countries can exchange their SDRs for hard currencies with other IMF members. “The newly-allocated SDRs are reflected in the GIR until the national government determines its use,” Diokno said.
The IMF distributed around $650 billion in SDRs — the largest in its history — to its member countries on Monday. Around $275 billion of the SDRs will go to emerging and developing countries, of which low-income countries will receive about $21 billion, the IMF said.
The IMF’s last SDR distribution came in 2009 when member countries received $250 billion in SDR reserves to help ease the global financial crisis.
Latest data from the BSP showed that the country’s gross international reserves level reached $106.55 billion as of end-July. The level represents a more than adequate external liquidity buffer equivalent to 12.1 months’ worth of imports of goods and payments of services and primary income.
It is also about 7.7 times the country’s short-term external debt based on original maturity and 5.1 times based on residual maturity.
Reserves hit a record level of $110 billion by end-2020. This year, BSP expects the reserves to reach $115 billion this year and further rise to $117 billion next year.
