MANILA, Philippines—The amount of dollars held in reserve by the central bank rose in August due to the additional resources made available by the International Monetary Fund to the Philippines recently, according to the regulator.
In a statement, the Bangko Sentral ng Pilipinas (BSP) said its gross international reserves, based on preliminary data, rose by around $900 million to $108.05 billion as of end-August 2021 from the end-July 2021 level of $107.15 billion.
“The increase in the reserves was due mainly to the additional allocation of Special Drawing Rights to the Philippines given the IMF’s efforts to increase global liquidity amid the pandemic,” the monetary authority said.
This was partly offset, however, by the national government’s foreign currency withdrawals from its deposits with the BSP as it settled its foreign currency debt obligations and paid for various expenditures, and the BSP’s net foreign exchange operations.
“The latest [dollar reserve] level represents a more than adequate external liquidity buffer equivalent to 12.3 months’ worth of imports of goods and payments of services and primary income,” the BSP said.
By convention, dollar reserves are viewed to be adequate if it can finance at least three-months’ worth of the country’s imports of goods and payments of services and primary income.
It is also about 7.8 times the country’s short-term external debt based on original maturity and 5.4 times based on residual maturity.
Similarly, net international reserves, which refer to the difference between the BSP’s gross reserves and total short-term liabilities, increased by $890 million to $108.04 billion as of end-August 2021 from the end-July 2021 level of $107.15 billion.
Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.
The level of dollar reserves, as of a particular period, is considered 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 twelve-month period.