THE country’s gross international reserves (GIR) hit a record high in September, data from the Bangko Sentral ng Pilipinas (BSP) showed on Monday.
At $112.0 billion, GIR surged from August’s $107.9 billion and was mainly the result of foreign currency deposits by the government, including proceeds from a global bond offering, and net income from the central bank’s investments abroad.
The current level was a more than sufficient external liquidity buffer, the BSP said, enough for 8.1 months of imports of goods and payments for services and primary income.
It was also about 6.3 times the country’s short-term external debt based on original maturity and 4.4 times based on residual maturity, it added.
The GIR level is considered 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 level is also considered sufficient “if it provides at least 100-percent cover for the payment of the country’s foreign liabilities, public and private, falling due within the immediate twelve-month period.”
Net international reserves, which comprise the difference between GIR and reserve liabilities, rose to $112.0 billion as of end-September from August’s $107.8 billion.
GIR consists of the BSP’s foreign investments, gold, foreign exchange, reserve position in the International Monetary Fund and special drawing rights.
Sought for comment, Bank of the Philippine Islands (BPI) senior economist Emilio Neri said the country had benefited from last month’s jumbo US Federal Reserve rate cut.
“With more US rate cuts expected BSP can accumulate further as long as it doesn’t cut the RRP (reverse repurchase, or benchmark rate) much more aggressively than the Fed,” he added.
Rizal Commercial Banking Corp. chief economist Michael Ricafort, meanwhile, said the country’s dollar inflows were growing due to remittances, business process outsourcing revenues, foreign tourism receipts, and an increase in foreign portfolio investments.
The end-September GIR result marked a fifth straight month of increases and followed reports last month that the BSP had sold nearly 25 tonnes of gold in the first half of 2024, the highest worldwide.
The central bank defended the move, saying the move was part of its “active management strategy of the country’s gold reserves.”
“The BSP took advantage of the higher prices of gold in the market and generated additional income without compromising the primary objectives for holding gold, which are insurance and safety,” it said last month.
The central bank pointed out that GIR remained robust with the end August-level of $107.9 billion, up from $103.8 billion as of the end of last year.
