The Philippines’ gross international reserves (GIR) climbed to $106.7 billion as of end-February 2025 from $103.3 billion in January, the Bangko Sentral ng Pilipinas (BSP) said over the weekend.
It was also higher than $102 billion in reserves registered a year ago. The BSP’s reserve assets consist of foreign investments, gold, foreign exchange, reserve position in the International Monetary Fund and special drawing rights.
The BSP said the latest GIR level represented a more than adequate external liquidity buffer equivalent to 7.5 months’ worth of imports of goods and payments of services and primary income.
“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,” the BSP said.
It was about 3.8 times the country’s short-term external debt based on residual maturity. The level of GIR 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 BSP said.
The month-on-month increase in the GIR level reflected mainly the national government’s (NG) net foreign currency deposits with the BSP, which include proceeds from its issuance of global bonds, upward valuation adjustments in the BSP’s gold holdings due to the increase in the price of gold in the international market and net income from the BSP’s investments abroad.
Data showed that the net international reserves (NIR) also increased $3.4 billion to $106.6 billion as of end-February 2025 from the end-January 2025 level of $103.2 billion.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp,. said the net increase in the GIR in recent months could be partly attributed to the proceeds of the national government’s $2.5 billion global (ROP) bond issuance reflected in September 2024, net increase in foreign investments in recent months amid Fed rate cuts.
“The increase in the GIR in recent months/years also partly attributed to the continued increase in the country’s structural US dollar inflows such as OFW remittances, BPO revenues, foreign tourism receipts, exports foreign investments [FDIs and foreign portfolio], among others; as well as proceeds of net foreign borrowings; some investment income from abroad amid gains in some of the U.S./global financial markets (US stock markets still near record highs in recent months); world gold prices again posted new record highs recently,” Ricafort said.
“The relatively higher GIR to provide greater cushion/buffer/support/ for the peso exchange rate vs. the US dollar, as fundamentally supported by the continued growth in the country’s structural U.S. dollar inflows especially from OFW remittances, BPO revenues, tourism receipts, foreign investments, among others,” he said.