The Philippines’ gross international reserves (GIR) dropped to $108.5 billion as of end-November 2024 from the end-October level of $111.1 billion, the Bangko Sentral ng Pilipinas (BSP) said over the weekend.
Data showed that on a year-on-year basis, the GIR rose from $102.7 billion in November 2023.
The BSP said that despite the month-on-month decline, the latest GIR level still represented a more than adequate external liquidity buffer equivalent to 7.8 months’ worth of imports of goods and payments of services and primary income.
It was also about 4.3 times the country’s short-term external debt based on residual maturity.
The BSP’s reserve assets consist of foreign investments, gold, foreign exchange, reserve position in the IMF and special drawing rights. By convention, the 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 BSP said the month-on-month decrease in the GIR level reflected mainly the national government’s net foreign currency withdrawals from its deposits with the BSP to settle its foreign currency debt obligations and pay for its various expenditures, BSP’s net foreign exchange operations and downward valuation adjustments in the BSP’s gold holdings due to the decrease in the price of gold in the international market.
Meanwhile, the net international reserves (NIR) declined by $2.6 billion to $108.4 billion as of end-November 2024 from the end-October 2024 level of $111.0 billion.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp. said that in the coming months, the GIR could still be supported by the continued growth in the country’s structural inflows from OFW remittances, BPO revenues, exports and relatively fast recovery in foreign tourism revenues.
“Still relatively high GIR may further strengthen the country’s external position, which in turn, fundamentally supports the country’s favorable credit ratings as seen recently,” he said.
