PH forex reserves slipped for 2nd month in Feb to $102.7B

MANILA — The Philippines’ dollar reserves slipped for the second month in February, driven by outflows from the government’s repayments of its maturing foreign debts.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed the country’s gross international reserves (GIR) amounted to $102.7 billion as of February, down by 0.58 percent from the $103.3 billion level in January.

The central bank attributed the month-on-month decline to the Marcos administration’s “payments of its foreign currency debt obligations.”

READ: Infra needs bloated PH foreign borrowings in 2023

Similarly, the net international reserves—or the difference between the GIR and external liabilities like short-term foreign debt and credit and loans from the International Monetary Fund (IMF)—slightly dropped 0.02 percent month-on-month to $102.66 billion.

Debt servicing

As the term connotes, the GIR serves as the country’s buffer against external shocks. The BSP’s reserve assets consist of foreign investments, gold, foreign exchange, reserve position in the IMF and special drawing rights.

READ: PH dollar reserves slipped in Jan

The central bank projects the GIR to end at $102 billion in 2024, lower than last year’s level of $103.8 billion. That forecast—which was released back in December 2023–was based on the assumption that the Philippines would post a dollar surplus of $400 million this year, lower than the earlier forecast of a $1-billion surplus, on expectations of improvements in the country’s external position.

Nevertheless, the end-January GIR level is more than enough to cover the country’s import needs for 7.7 months.

It is also about six times the country’s short-term external debt based on original maturity and 3.9 times based on residual maturity. —Ian Nicolas P. Cigaral