Philippines’ gross international reserves (GIR) are lower end-May at $106.978 billion compared to end-April’s $107.705 billion, the Bangko Sentral ng Pilipinas (BSP) reported Friday.

The government withdrew the difference or $730 million to pay for maturing loans and for other expenses, according to the BSP.

“The month-on-month decrease in the GIR level reflected outflows mainly from the foreign currency withdrawals of the National Government from its deposits with the BSP to pay its foreign currency debt obligations and various expenditures,” the BSP said in a statement.

“These outflows were partly offset, however, by the inflows from the BSP’s foreign exchange operations and income from its investments abroad, and an upward adjustment in the value of the BSP’s gold holdings due to the increase in the price of gold in the international market,” the BSP added.

The BSP said at this level, the GIR remains an “adequate external liquidity buffer”. It is equivalent to 12.2 months’ worth of imports of goods and payments of services and primary income. It is also 7.4 times the country’s short-term external debt based on original maturity and 5.1 times based on residual maturity.

Generally, a GIR is considered adequate if it can finance at least three months’ worth of imports of goods and payments of services and primary income. It is also deemed sufficient if it provides at least 100 percent cover for the payment of the country’s foreign liabilities, public and private, falling due within 12 months.

The GIR is composed of foreign assets of the BSP invested in foreign-issued securities, monetary gold, and foreign exchange.

Compared to same time in 2020, GIR increased by $13.69 billion.

As of end-May, foreign investments of the BSP amounted to $92.640 billion, up from same time last year of $80.676 billion. It is also more than end-May this year of $91.188 billion.

Gold holdings totalled $9.907 billion in the first five months, it is higher than $8.015 billion in 2020. The gold hoard is also up from $9.310 billion end-April this year.

In April, BSP Governor Benjamin E. Diokno said he expects the GIR to reach $120 billion by end-2021 which is $6 billion more than BSP’s forecast of $114 billion.

Source: Manila Bulletin (