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Keisha Ta-Asan - The Philippine Star
February 10, 2025 | 12:00am
Preliminary data from the BSP showed the country’s gross international reserves (GIR) settled at $103.02 billion in January, three percent lower than the $106.26 billion in December last year.
STAR / File
MANILA, Philippines — The country’s dollar reserves dropped to a nine-month low in January as the Bangko Sentral ng Pilipinas (BSP) intervened in the foreign exchange market and the government paid its foreign debts.
Preliminary data from the BSP showed the country’s gross international reserves (GIR) settled at $103.02 billion in January, three percent lower than the $106.26 billion in December last year.
The January GIR marked the lowest level since April 2024’s $102.65 billion. It was also the fourth straight month that dollar reserves declined.
“The month-on-month decrease in the GIR level reflected mainly the BSP’s net foreign exchange operations and drawdown on the national government’s deposits with the BSP to pay off its foreign currency debt obligations,” the central bank said.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., also attributed the decline to foreign debt maturities, government expenses in foreign currency and the BSP’s interventions amid the dollar-peso volatility.
Based on BSP data, foreign exchange dropped by 46.3 percent to $733.5 million from the December 2024 level of $1.37 billion.
Earnings from investments abroad slid by 3.7 percent to $86.13 billion in January from $89.48 billion a month ago.
The central bank’s gold holdings, on the other hand, went up by 6.8 percent to $11.75 billion from the end-2024 level of $11 billion.
Nonetheless, the current GIR level represents a more than adequate external liquidity buffer equivalent to 7.3 months’ worth of imports of goods and payments of services and primary income.
Moreover, it is also about 3.6 times the country’s short-term external debt based on residual maturity.
The GIR is the sum of all foreign exchange flowing into the country and serves as a buffer to ensure that it will not run out of foreign exchange that it can use in case of external shocks.
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.
It is also deemed 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 $110 billion this year.
