The country’s foreign exchange reserves slipped slightly in October due to lower gold prices and withdrawals by the national government to cover its foreign debt payments, documents from the Bangko Sentral ng Pilipinas (BSP) showed.
These gold and foreign exchange reserves, which are held by the BSP, were still enough to cover a year’s worth of imports and 8.7 month’s worth of the nation’s total foreign debt based on original maturity.
“The slight decline in reserves was due mainly to payments by the national government of its maturing foreign exchange obligations and revaluation gains on the BSP’s gold holdings,” the BSP said.
At the end of October, the country’s gross international reserves (GIR) slipped to $83.42 billion, slightly lower than the $83.5 billion recorded the month before. This marked the second consecutive month that the country’s foreign exchange reserves went down.
The BSP said the lower value of the BSP’s gold holdings, which is booked as outflows, as well as the national government’s withdrawals were partially offset by foreign exchange deposits by the National Treasury and income from investments of the BSP.
About 86 percent or $72.05 billion of the country’s reserves are made up of low-risk and low-yield investment instruments such as US treasuries.
About $8.15 billion is made up of gold and other gold-backed securities, $1.34 billion are in foreign currencies like the dollar and the yen and $1.29 billion in the International Monetary Fund’s (IMF) Special Drawing Rights.
Net international reserves, which refer to the difference between the BSP’s GIR and total short-term liabilities, decreased to $83.4 billion in October from $83.5 billion the month before.
The countries foreign exchange reserves serve as the last line of defense against external crises that may lead to the flight of foreign money from the country.