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March 01, 2024

Foreign currency reserves surge ahead a second time

The country’s gross international reserves (GIR), which generally trended lower the past year and had in fact contracted twice, surged higher in March for the second month in a row.

The Bangko Sentral ng Pilipinas reported late on Thursday of the GIR having risen another 3.9 percent in March to $108.54 billion after growing by only 2.5 percent in February to $107.80 billion

In the two months immediately before, the country’s foreign currency reserves contracted by 0.9 percent in January this year and by 1.2 percent in December 2021.

The foreign currency reserves in March this year compares with the GIR aggregating $104.48 billion last year.

The latest GIR level represents a more than adequate external liquidity buffer equivalent to 9.6 months’ worth of imports of goods and payments of services and primary income, the BSP said.

It is also about 7.2 times the country’s short-term external debt based on original maturity and 5.4 times based on residual maturity, the BSP added.

The month-on-month increase in the GIR level reflected mainly the National Government’s (NG) net foreign currency deposits with the BSP, which include proceeds from its issuance of ROP global bonds, and the BSP’s net income from its investments abroad.

Similarly, the net international reserves (NIR), or the difference between the BSP’s reserve assets (GIR) and reserve liabilities (short-term foreign debt and credit and loans from the International Monetary Fund), increased by $0.74 billion to $108.53 billion as of end-March 2022 from the end-February 2022 level of $107.79 billion.

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