PH forex reserves ‘more than enough’, says BSP

The country’s gross international reserves (GIR) increased to $107.98 billion as of end-February 2022 from $107.69 billion a month earlier, preliminary data at the Bangko Sentral ng Pilipinas (BSP) show.

The BSP in a statement reiterated that the GIR represented a more than adequate external liquidity buffer, with the latest level being equivalent to 10.2 months’ worth of imports of goods and payments of services and primary income.

Also, the end-February GIR was about 8.4 times the country’s short-term external debt based on original maturity and 5.8 times based on residual maturity.

“The month-on-month increase in the GIR level reflected mainly the upward adjustment in the value of the BSP’s gold holdings due to the increase in the price of gold in the international market and the BSP’s net income from its investments abroad,” the regulator said.

Further, the BSP said its net international reserves (NIR)—the difference between the GIR and reserve liabilities—increased to $107.97 billion at the end of February from $107.68 billion at the end of January.

Reserve liabilities refer to short-term foreign debt and credit and loans from the International Monetary Fund.

Earlier this week, BSP Governor Benjamin Diokno told the Young Presidents’ Organization Philippines Inc. that given such a sufficient external buffer, the Philippines was in a favorable position to navigate tightening global financial conditions.

Diokno said that this was so even if the normalization of the currently ultra-accommodative monetary policy in advanced economies could lead to a rebalancing of global capital flows and depreciation of emerging markets’ currencies vis-à-vis the dollar.

—Ronnel W. Domingo INQ