The gross international reserves declined slightly to $106.98 billion in May from $107.71 billion in April as the government settled some of its foreign debts, the Bangko Sentral ng Pilipinas said Friday.
“The month-on-month decrease reflected outflows mainly from the foreign currency withdrawals of the national government from its deposits with the BSP to pay its foreign currency debt obligations and various expenditures,” the BSP said in a statement.
It said these outflows were partly offset by the inflows from the BSP’s foreign exchange operations and income from investments abroad and an upward adjustment in the value of gold holdings due to the increase in the price of gold in the international market.
The reserves level represents a more than adequate external liquidity buffer equivalent to 12.2 months’ worth of imports of goods and payments of services and primary income, the BSP said.
The May figure was also about 7.4 times the country’s short-term external debt based on original maturity and 5.1 times based on residual maturity. 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.
Data showed the GIR consisted of $92.64 billion worth of foreign investments, $9.9 billion in gold holdings, $2.39 billion in foreign exchange, $1.23 billion in special drawing rights, and $807.9 million in reserve position in the International Monetary Fund.
The net international reserves also decreased by $730 million to $106.96 billion in May from the April level of $107.69 billion.
The GIR hit a record-high of $110.117 billion in December 2020. The BSP expects it to settle at $114 billion by end-2021 and $117 billion by end-2022.
This, however, may be affected by the widening balance of payments deficit which reached $231 million in the first four months, a reversal of the $1.6-billion surplus recorded in the same period last year.
The BOP deficit would have been higher if not for the government’s receipt of foreign loans this year. In April, national government issued global bonds amounting to $2.52 billion and ROP Samurai bonds worth $498 million for the general financing and operational requirements.
“Based on preliminary data, this cumulative BOP deficit was partly due to the country’s merchandise trade deficit and net outflows of foreign portfolio investments,” the BSP said.
Data from the Philippine Statistics Authority showed that the trade deficit widened to $11 billion in the first four months from $8.6 billion a year ago as imports recovered and grew faster than exports.
Merchandise exports increased by 21.9 percent in the four-month period to $34.46 billion, while exports went up by 19 percent to $23.37 billion.