Phl dollar reserves slip to $102.67 B

The country’s foreign exchange buffer slipped to $102.67 billion in February, the second straight month of decline, acccording to the Bangko Sentral ng Pilipinas.

The BSP said the country’s gross international reserve (GIR) level dipped by 0.6 percent from $103.27 billion in January, but was 4.5 percent higher than the $98.22 billion recorded in February 2023.

“The month-on-month decrease in the GIR level reflected mainly the national government’s payments of its foreign currency debt obligations,” the central bank said.

Foreign currency deposits fell by 40.9 percent to $686.3 million in February from $1.16 billion in January. But it climbed by 31.9 percent from the $520.5 million seen in the same month in 2023.

“Despite the decline, the GIR remains healthy at over $100 billion, offering a comfortable buffer for imports and external obligations. This level is also several times higher than the country’s short-term external debt,” Security Bank chief economist Robert Dan Roces said in a Viber message.

The GIR is a key indicator of an economy’s financial stability and its ability to mitigate external risks. It also serves as a buffer to ensure that the country can cover its shortterm liabilities and will not run out of foreign exchange in case of external shocks.

The buffer has stayed above the $100-billion level since October 2023.

The GIR level in February was equivalent to 7.7 months’ worth of imports of goods and payments of services and primary income. The figure was also about six times the country’s short-term external debt based on original maturity and 3.9 times based on residual maturity.

The central bank’s foreign investments reached $87.11 billion, down by 0.2 percent from the $87.28 billion in the previous month. Year-on-year, foreign investments went up by 3.9 percent from $83.83 billion.

The value of the central bank’s gold holdings barely moved to $10.34 billion in February from $10.3 billion in January, but was 10.8 percent higher than last year’s $9.33 billion.

The country’s reserve position in the International Monetary Fund (IMF) slipped 0.2 percent to $752.5 million from $753.9 in January. Yearon-year, it went down by 4.2 percent.

Special drawing rights, or the amount the country can tap from the IMF, stood at $3.78 billion in February, inching up by 0.2 percent from $3.77 billion a month ago. It was also 0.9 percent higher year-on-year.

“Continued economic growth can attract foreign investment and boost exports, leading to a higher GIR. Additionally, the government’s debt management strategy and the BSP’s foreign exchange interventions will play a role,” Roces said.

The BSP projects the GIR level at $102 billion this year after increasing by 7.9 percent to $103.75 billion in 2023from $96.15 billion in 2022.