The Philippines’ gross international reserves (GIR) fell to $106.84 billion as of end-December 2024 from the end-November 2024 level of $108.49 billion, the Bangko Sentral ng Pilipinas (BSP) said Tuesday.
It said the month-on-month decrease in the GIR level reflected mainly the BSP’s net foreign exchange operations, drawdown on the national government’s (NG) deposits with the BSP to pay off 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 BSP’s reserve assets consist of foreign investments, gold, foreign exchange, reserve position in the IMF, and special drawing rights.
The latest GIR level represents a more than adequate external liquidity buffer equivalent to 7.5 months’ worth of imports of goods and payments of services and primary income, the BSP said.
By convention, GIR is viewed to be adequate if it can finance at least three-months’ worth of the country’s imports of goods and payments of services and primary income.
“Moreover, it is also about 3.8 times the country’s short-term external debt based on residual maturity,” the BSP said.
Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.
The level of GIR, as of a particular period, is considered adequate, if it provides at least 100 percent cover for the payment of the country’s foreign liabilities, public and private, falling due within the immediate twelve-month period.
The net international reserves (NIR) declined by $1.63 billion to $106.83 billion as of end-December 2024 from the end-November 2024 level of $108.46 billion.
NIR refers to the difference between the BSP’s reserve assets (GIR) and reserve liabilities (short-term foreign debt and credit and loans from the IMF).
