Forex reserves resume uptrend in February

After a slight dip at the start of the year, the Philippines’ total foreign exchange reserves rose in February to approach the historic high recorded at the end of 2019 due mainly to foreign currency deposits by the national government from its overseas borrowings and the earnings of the central bank from its foreign currency operations.

According to the latest data from the Bangko Sentral ng Pilipinas, the country’s gross international reserves (GIR) rose by $740 million from $86.87 billion as of end-January 2020 to $87.61 billion as of end-February 2020.

At this level, the country’s dollar reserves can cover 7.7 months’ worth of imports of goods and services and payments of primary income.

It is also equivalent to 5.4 times the country’s short-term external debt based on original maturity and 3.8 times based on residual maturity.

“The month-on-month increase in the [dollar reserve] level reflected inflows arising from the national government’s net foreign currency deposits and BSP’s net foreign exchange operations,” the central bank statement said.

“These inflows were partly offset, however, by payments made by the national government for servicing its foreign currency debt obligations,” it added.

Net international reserves—which refers to the difference between the BSP’s total dollar reserves and total short-term liabilities—likewise increased by $74 million to $87.6 billion as of end-February 2020 from the end-January 2020 level of $86.86 billion.