The payment of more foreign obligations and the decline in the price of gold in the world market trimmed the country’s gross international reserves (GIR) slightly to $106.76 billion in April from $107.31 billion in March.
The GIR – 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 month-on-month decrease in the GIR level reflected mainly the national government’s foreign currency withdrawals from its deposits with the Bangko Sentral ng Pilipinas as it settled its foreign currency debt obligations and paid for various expenditures as well as the 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 central bank said in a statement.
The BSP said the country’s foreign exchange buffer represents a more than adequate external liquidity buffer equivalent to 9.4 months’ worth of imports of goods and payments of services and primary income.
The GIR level is also about seven times the country’s short-term external debt based on original maturity and 5.5 times based on residual maturity.
The central bank’s Monetary Board is expecting a smaller GIR of $108 billion instead of $112 billion for 2022 and $109 billion for 2023.