THE Philippines’ foreign reserves rose at the end of March 2024, reflecting the appreciation of the central bank’s gold assets and overseas investments.
Preliminary data released by the Bangko Sentral ng Pilipinas (BSP) showed that the country’s gross international reserves (GIR) — a measure of the country’s ability to import payments and service foreign debt — settled at $104 billion.
This is higher than the end-February 2024 level of $102 billion.
The BSP’s reserve assets consist of foreign investments, gold, foreign exchange, a reserve position in the International Monetary Fund (IMF), and special drawing rights.
“The month-on-month increase in the GIR level reflected mainly the national government’s (NG) net foreign currency deposits with the BSP, upward valuation adjustments in the value of 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,” the central bank said.
The BSP said the end-March GIR level translates to “a more than adequate external liquidity buffer equivalent to 7.7 months’ worth of imports of goods and payments of services and primary income.”
The GIR is conventionally viewed as adequate if it can finance at least three months’ worth of the country’s imports of goods, payments of services, and primary income — earnings of overseas Filipino workers as well as the profit of Philippine investments abroad.
The end-March foreign reserves level was about 6.1 times the country’s short-term external debt based on original maturity and 3.7 times based on residual maturity.
Short-term debt based on residual maturity refers to outstanding external debt with an original maturity of one year or less, plus principal payments on medium- and long-term loans in 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% cover for the payment of the country’s foreign liabilities, public and private, falling due within the immediate twelve-month period, according to the BSP.
Similarly, the net international reserves — the difference between the BSP’s reserve assets (GIR) and reserve liabilities (short-term foreign debt and credit and loans from the IMF) — increased by $1.8 billion to $103.8 billion as of end-March 2024 from the end-February 2024 level of $102 billion. (GMA Integrated News)
