Dollar reserves hit $110.9 billion in December

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January 9, 2026 | 12:00am

MANILA, Philippines —  The country’s gross international reserves (GIR) settled at $110.9 billion as of end-December 2025, slightly lower month-on-month but still higher than a year earlier and well above the Bangko Sentral ng Pilipinas (BSP)’s own projection for the year.

Based on preliminary data from the central bank, the latest forex buffer remained higher by 4.3 percent than the $106.26 billion in December 2024, marking its third straight year of increase.

The end-2025 level also exceeded the BSP’s earlier projection of $105 billion for the year, underscoring the country’s still comfortable external buffer.

After hitting $110.12 billion in 2020, the buffer declined to $108.79 billion in 2021 and $96.15 billion in 2022, before picking up to $103.75 in 2023 and to $106.26 billion in 2024.

On a monthly basis, dollar reserves slipped by 0.3 percent from the $111.25 billion in November 2025.

RCBC chief economist Michael Ricafort said the month-on-month decline was due to the 1.1-percent drop in foreign investments to $87 billion in December last year.

However, this was “positively offset by the continued month-on-month increase in gold holdings by $552 million or 3.1 percent to a new record high of $18.577 billion,” Ricafort said.

The economist noted that world gold prices gained 1.9 percent month-on-month in December 2025 and “posted a new record high of $4,549.92 per ounce on Dec. 26, 2025,” helping lift the value of the BSP’s gold holdings.

BSP Governor Eli Remolona Jr. said the rise in the value of the central bank’s gold holdings reflected higher global gold prices rather than any gold trading by the BSP during the month.

Remolona also addressed the BSP’s strategy on holding gold as part of the reserves, stressing that the central bank does not speculate on the metal’s price.

“We don’t speculate on the price of gold. What we do is we hold gold as a modest proportion of our reserves and we hold gold as a hedge against what we call event risk,” he said.

He added that the BSP simply maintains a proportion of gold in its reserves as protection against adverse global events, reinforcing the role of the GIR as a buffer for the economy during periods of financial market stress.

The latest reserve level provides a robust external liquidity buffer equivalent to 7.4 months’ worth of imports of goods and payments of services and primary income. It also covers about four times the country’s short-term external debt based on residual maturity.

GIR are composed of foreign-denominated securities, foreign exchange and other assets including gold. It is also used to help finance imports and foreign debt obligations, stabilize the currency and provide a buffer against external shocks.

Ricafort said the relatively high level of reserves is important amid bouts of volatility in the local foreign exchange market. He cited that the peso reached a new record low of 59.38 against the dollar on Jan. 7.

In this context, he said ample reserves “would help fundamentally support the peso exchange rate versus any speculative attacks. It would also fundamentally provide ammunition for any intervention in the local foreign exchange market, if necessary.”

Remolona said the central bank has intervened in the foreign exchange market in recent months, but it was in small amounts just to limit the volatility.

Remolona also addressed the BSP’s strategy on holding gold as part of the reserves, stressing that the central bank does not speculate on the metal’s price.

“We don’t speculate on the price of gold. What we do is we hold gold as a modest proportion of our reserves and we hold gold as a hedge against what we call event risk,” he said.

He added that the BSP simply maintains a proportion of gold in its reserves as protection against adverse global events, reinforcing the role of the GIR as a buffer for the economy during periods of financial market stress.

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.

It is also 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 12-month period.

The BSP expects the country’s dollar reserves to hit $106 billion this year.