The country’s gross international reserves (GIR) level thinned to $101.98 billion in June from $103.65 billion in May, the Bangko Sentral ng Pilipinas (BSP) reported.
The foreign exchange buffer slipped by 1.6 percent month-on-month and was the lowest in 21 months or since the $100.44 billion recorded in September 2020.
“The month-on-month decrease in the GIR level reflected mainly the national
government’s payments of its foreign currency debt obligations and downward
adjustment in the value of the BSP’s gold holdings due to the decrease in the price of gold in the international market,” the BSP said.
Latest data showed the value of the central bank’s gold holdings decreased for the fourth straight month to $8.94 billion in June from $9.03 billion in May.
However, the BSP said the foreign exchange buffer represents a more than adequate external liquidity buffer equivalent to 8.5 months’ worth of imports of goods and payments of services and primary income.
It is also 7.3 times the country’s short-term external debt based on original maturity and 4.6 times based on residual maturity.
The reserves is the sum of all foreign exchange flowing into the country and serves as buffer to ensure that it will not run out of foreign exchange that it could use in case of external shocks.
The central bank sees a smaller GIR of $108 billion instead of $112 billion for this year and $109 billion for next year.