MANILA, Philippines — The Philippines’ dollar reserves inched up in March due to fresh deposits made by the national government to the Bangko Sentral ng Pilipinas (BSP), which also made a killing with its investments abroad and gold holdings.
The country’s gross international reserves (GIR) rose to $104 billion in March from $102 billion in February, preliminary data released by the BSP on Saturday showed.
Similarly, the net international reserves—the difference between the GIR and reserve liabilities like short-term foreign debt as well as credit and loans from the International Monetary Fund (IMF)—increased by $1.8 billion month-on-month to $103.8 billion in March.
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.
By convention, GIR is 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.
The reserves are also considered adequate if they provide at least 100 percent cover for the payment of the country’s foreign liabilities—both of the public and private sectors—falling due within the immediate 12-month period.
The central bank projects the GIR to end at $103 billion in 2024, a tad lower than last year’s level of $103.8 billion.
That forecast, which was released last month, was based on the assumption that the Philippines would post a dollar surplus of $700 million this year, higher than the earlier forecast of a $400-million windfall, on expectations of improvements in the country’s external position.
According to the BSP, the end-March GIR represents a more than adequate external liquidity buffer equivalent to 7.7 months’ worth of imports of goods and payments of services and primary income.
Moreover, the buffer funds are about 6.1 times the country’s short-term external debt based on original maturity and 3.7 times based on residual maturity.