The Philippines’ gross international reserves climbed to $104.48 billion as of end-May 2024 from the end-April level of $102.65 billion, the Bangko Sentral ng Pilipinas (BSP) said over the weekend.
It said 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.
It was also about 5.9 times the country’s short-term external debt based on original maturity and 3.6 times based on residual maturity.
“The month-on-month increase in the GIR level reflected mainly the national government’s net foreign currency deposits with the Bangko Sentral ng Pilipinas which include proceeds from its issuance of ROP global bonds and net income from the BSP’s investments abroad,” the BSP said.
The net international reserves, which refers to the difference between the BSP’s GIR and reserve liabilities (short-term foreign debt and credit and loans from the International Monetary Fund), increased by $1.87 billion to $104.46 billion as of end-May from $102.59 billion a month earlier.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the May GIR level was still above the minimum international threshold of 3 to 4 months and could still provide greater buffer/support/cushion on the peso exchange rate against any speculative attacks.
“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 [though offset by imports] and relatively fast recovery in foreign tourism revenue,” he said.
Ricafort said the relatively high GIR could still strengthen the country’s external position, 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.
He said this is a sign of resilience despite the COVID-19 pandemic that caused downgrades in other countries around the world.
