PAYMENTS made by the national government on its foreign currency debts and lower gold prices pushed the country’s gross international reserves (GIR) to below $100 billion in August 2023, according to the Bangko Sentral ng Pilipinas (BSP).
Based on the latest data, the country’s GIR level settled at $99.8 billion as of end-August 2023, from the end-July 2023 level of $100 billion.
However, the GIR level in August 2023 was higher than the $97.44 billion recorded by BSP in August 2022.
“The month-on-month decrease in the GIR level reflected mainly the National Government’s [NG] payments of its foreign currency debt obligations and the downward adjustments in the value of BSP’s gold holdings due to the decrease in the price of gold in the international market,” BSP said.
The BSP also said the net international reserves decreased by $0.1 billion to $99.8 billion as of end-August 2023 from the end-July 2023 level of $99.9 billion.
This refers to the difference between the BSP’s reserve assets or GIR and reserve liabilities or short-term foreign debt and credit and loans from the International Monetary Fund (IMF).
The BSP’s reserve assets consist of foreign investments, gold, foreign exchange, reserve position in the IMF and special drawing rights.
The BSP said short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.
The BSP, meanwhile, said the latest GIR level represents a more-than-adequate external liquidity buffer equivalent to 7.4 month’s worth of imports of goods and payments of services and primary income.
The central bank said the GIR is viewed to be adequate if it can finance at least three-months’ worth of the country’s imports of goods and payments of services and primary income.
Moreover, the GIR in August is also 5.9 times the country’s short-term external debt based on original maturity and 4.1 times based on residual maturity.
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