The country’s dollar reserves slid to a four-month low of $81.413 billion in June partly as global gold prices fell alongside a weaker peso, preliminary Bangko Sentral ng Pilipinas data released Friday night showed.
The gross international reserves (GIR) level last month was the lowest since the $81.436 billion posted in February, as well as lower than the $85.284 billion a year ago.
In a statement, BSP Governor Nestor A. Espenilla Jr. attributed the drop in reserves from May’s $82.177 billion to “outflows arising from the BSP’s foreign exchange operations, payments made by the national government for its maturing foreign exchange obligations, and revaluation adjustments on the BSP’s gold holdings resulting from the decrease in the price of gold in the international market.”
In late June, the peso weakened to an almost 11-year low, sliding to 50:$1 levels.
READ: Peso remains at almost 11-year low
Espenilla nonetheless said the national government’s net foreign currency deposits as well as income from the BSP’s foreign investments partially offset the decline in dollar reserves.
The end-June GIR can cover 8.7 months’ worth of imports of goods as well as payments of primary income and services.
Also, the dollar reserves level as of June were equivalent to 5.6 times the short-term external debt based on original maturity, as well as 3.8 times based on residual maturity.
The BSP defines short-term debt based on residual maturity as outstanding foreign debt whose original maturity was a year or less, plus principal payments on medium- and long-term loans of the government as well as the private sector that were due within the next 12 months.
As for net international reserves, or the difference between the GIR and total short-term liabilities, these also decreased to $81.39 billion last June from $82.16 billion in May.
Last month, the BSP projected 2017 dollar reserves to slightly decline to $80.5 billion, equivalent to 8.3 months of import cover, from end-2016’s $80.7 billion.
The BSP’s updated projection was lower than the previous $84.7 billion or 8.8 months of imports.