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May 27, 2024

Short-term fix: BSP taps reserves with $275.8 million loan

The Bangko Sentral ng Pilipinas (BSP) tapped its foreign exchange reserves for a short-term loan of $275.8 million in March, marking the fourth such instance since October 2023.

The loan, classified by the BSP as a “gross international reserves (GIR)-related loan,” is part of the central bank’s broader reserve management activities. The previous loan, for a larger amount of $587.4 million, was secured in January.

Despite the borrowing, the Philippines’ overall reserves position improved slightly. The country’s GIR stood at $104.033 billion at the end of March, compared to $101.994 billion at the end of February.

The BSP also reported an increase in net international reserves (NIR) to $103.8 billion at the end of March, from $102 billion a month earlier.

NIR represents the difference between the BSP’s reserve assets and its short-term foreign liabilities, including credit and loans from the International Monetary Fund.

The BSP’s reserve assets are comprised of gold, foreign investments (primarily securities and bonds), foreign exchange holdings, reserve position in the IMF, and special drawing rights.