Eli Remolona Jr. —IAN NICOLAS P. CIGARAL
MANILA, Philippines — The country’s dollar reserves jumped to a three-month high in February, thanks to inflows from fresh foreign borrowings of the government and gains from the central bank’s gold holdings and investments abroad.
Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed that the country’s gross international reserves (GIR) had gone up by 3.29 percent month-on-month to $106.7 billion in February. This was the highest level of GIR since November 2024, when the buffer funds had amounted to $108.5 billion.
The GIR serves as the country’s buffer against external shocks. The reserve assets consist of foreign investments of the central bank, gold and foreign exchange as well as borrowing authority with the International Monetary Fund (IMF) and the country’s contributions to the same Washington-based institution.
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Broken down, the BSP’s foreign exchange holdings went up by 5.12 percent to $786.5 million after the national government added the proceeds from its recent global bond sale to its foreign currency deposits with the central bank. Offshore investments of the BSP, which accounted for the bulk of the GIR, likewise grew by 3.52 percent to $89.41 billion.
Enough buffer
Meanwhile, the value of the central bank’s gold holdings went up by 2.53 percent to $12 billion due to an increase in the price of the precious metal in the international market.
Lastly, the country’s contribution to the IMF slightly dipped by 0.16 percent to $670.2 million while special drawing rights were relatively flat at $3.74 billion.
Overall, the BSP said the GIR as of February represented a more than adequate external liquidity buffer equivalent to 7.5 months’ worth of imports.
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 BSP, led by Governor Eli Remolona Jr., forecasts a $110-billion GIR by the end of 2025. This is on expectation that the country would post a balance of payments surplus of $2.1 billion, as dollar inflows from remittances, travel receipts, BPO revenues and foreign direct investments are projected to offset the outflows from persistent trade deficit.