Philippines’ forex reserves back above $100B in March
MANILA -The Philippines’ gross international reserves (GIR) rose anew to reach $100.2 billion in March after dipping below the century mark in February, and continue to be more than enough buffer for the country’s import bill.
Data at the Bangko Sentral ng Pilipinas (BSP) show that $2 billion flowed into the stock that was at $98.2 billion at the end of February.
Consisting of foreign investments, gold, foreign currencies, reserve position in the International Monetary Fund, and special drawing rights, the BSP’s reserve assets are considered adequate if they can finance at least three-months’ worth of the country’s imports of goods and payments of services and primary income.
“The latest GIR level represents a more than adequate external liquidity buffer equivalent to 7.5 months’ worth of imports of goods and payments of services and primary income,” the BSP said in a statement.
“Moreover, it is also about six times the country’s short-term external debt based on original maturity and 4.2 times based on residual maturity,” it added.
Highest in 9 months
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the GIR was at its highest in nine months or since $100.8 billion in June 2022.
Ricafort said that, in the coming months, the GIR could still be supported by the continued growth in inflows from overseas Filipino workers, business process outsourcing operations, exports and relatively fast recovery in foreign tourism revenues, among others.
“Still relatively high, the GIR would help strengthen the country’s external position, which is a key pillar for the Philippines’ continued favorable credit ratings for the second straight year, which are mostly at one to three notches above the minimum investment grade,” the economist added.
The GIR first breached the $100-billion mark at $100.4 billion in September 2020 and ended 2022 at $96.15 billion. The reserves registered above $100 billion in 2020 and 2021.
According to the BSP’s latest forecast, the year-end GIR is now expected to return to the $100-billion level this year.
New forecast
This new forecast reverses the forecast made three months ago, which placed the end-2023 GIR lower at $93 billion. The BSP said the upward revision of the forecast was partly due to expectations of a narrower deficit in the trade of goods with the rest of the world.
The regulator added that the GIR’s increase in March was mainly due to the national government’s net foreign currency deposits with the BSP.
There was also an upward revaluation of the BSP’s gold holdings due to the increase in the price of gold in the international market.
The BSP’s cache of gold was valued at $10.07 billion in March, an increase of $743 million or 8 percent from $9.33 billion in February.
Further, the BSP’s foreign investments, which account for 84 percent of the GIR, increased by 0.4 percent to $84.14 billion in March from $83.83 billion in February. INQ
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