Gold prices, debt pull dollar reserves below $100 billion


LOWER gold prices in the international market as well as the government’s debt payments pulled down gross international reserves (GIR) to below $100 billion in February, according to the Bangko Sentral ng Pilipinas (BSP).

The BSP’s preliminary data showed the country’s GIR settling at $99.3 billion at the end of February 2023 from the $100.7 billion in January 2023. The GIR was at $107.8 billion in February 2022.

The BSP’s reserve assets consist of foreign investments, gold, foreign exchange, reserve position in the International Monetary Fund (IMF), and special drawing rights.

“The month-on-month decrease in the GIR level reflected mainly the National Government’s [NG] net foreign currency withdrawals from its deposits with the BSP to settle its foreign currency debt obligations and pay for its various expenditures, and downward adjustments in the value of the BSP’s gold holdings due to the decrease in the price of gold in the international market,” BSP explained.

The latest GIR level, BSP said, represented a more than adequate external liquidity buffer equivalent to 7.5 months’ worth of imports of goods and payments of services and primary income.

GIR is deemed adequate if it can finance at least three months’ worth of the country’s imports of goods and payments of services and primary income.

Further, BSP said the GIR in February is 6.1 times the country’s short-term external debt based on original maturity and 4.1 times based on residual maturity.

The BSP said the net international reserves, which 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 IMF, also decreased.

The data showed the net international reserves declined by $1.3 billion to $99.3 billion as of February 2023 from $100.6 billion in January 2023.

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.

It added that the level of GIR, as of a particular period, is considered adequate, if it provides at least 100 percent cover for the payment of the country’s foreign liabilities, public and private, falling due within the immediate 12-month period.

Image credits: Roman Romaniuk |