The Philippines’ gross international reserve settled at $102.5 billion in December 2023, down slightly from the previous month, following the government’s payments of foreign currently debt obligations, according to the Bangko Sentral ng Pilipinas (BSP).
Preliminary data from the BSP showed that the GIR level in December fell from $102.7 billion registered in November. The latest GIR level, however, was higher than $96.14 billion in December in 2022.
The BSP said this 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 6.0 times the country’s short-term external debt based on original maturity and 3.8 times based on residual maturity.
Meanwhile, the net international reserves, which refers to the difference between the BSP’s reserve assets (GIR) and reserve liabilities (short-term foreign debt and credit and loans from the International Monetary Fund (IMF), increased by $0.5 billion to $102.4 billion as of end-December 2023 from the end-November 2023 level of $101.9 billion.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the country’s latest GIR level was still way above the minimum international threshold of three to four months, “thereby could still provide greater buffer/support/cushion on the peso exchange rate vs. 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], relatively fast recovery in foreign tourism revenues,” he said.
Ricafort said the GIR could strengthen in the coming months as the country’s external position, a key pillar for the continued favorable credit ratings for the second straight year, remained healthy.
“[It is] a sign of resilience despite the COVID-19 pandemic that caused downgrades in other countries around the world,” he said.