The country’s economic shock absorber might have thinned slightly in March, but it remained more than enough, based on international benchmarks, the Bangko Sentral ng Pilipinas (BSP) said.
According to data released Tuesday, the dollar reserves held by the BSP declined last month as the government settled maturing overseas obligations. A stronger dollar also pushed down the value of reserve assets denominated in other currencies.
“These were partially offset by the government’s foreign exchange deposits, and the BSP’s foreign exchange operations and income from abroad,” the regulator said in a statement.
At the end of March, the country’s gross international reserves (GIR) slipped to $80.4 billion, from $80.8 billion in February.
March’s dip could point to a deficit in the country’s balance of payments (BOP) position for the month. A BOP deficit means more money left the country than what came in during the month, forcing the BSP to release part of its reserve holdings to keep the peso stable.
The BOP is the difference between the amount of money that enters the country and the cash that leaves the economy.
Inflows come in the form of remittances, revenues from certain industries, such as business process outsourcing (BPO) and tourism, investments and export sales. Foreign debt payments, the importation of goods and divestment by foreign funds are counted as outflows.
The country’s reserves at the end of March were still enough to pay for imports of goods and services for up to 10 and a half months, the BSP said. It was also enough to cover 4.9 times the country’s short-term external debt based on original maturity.