AN increase in the value of the country’s gold holdings allowed the country’s Gross International Reserves (GIR) to bounce back after posting two consecutive months of decline, according to data released by the Bangko Sentral ng Pilipinas (BSP).
The country’s GIR level, based on preliminary data, rose to $99.7 billion as of end-July 2023 from the end-June 2023 level of $99.4 billion.
Based on the data, the value of gold held by the Philippines reached $10.3 billion, the highest since the end-2020 figure of $11.61 billion.
“The month-on-month increase in the GIR level reflected mainly the upward valuation adjustments in the value of the BSP gold holdings due to the increase in the price of gold in the international market,” BSP said.
“(The increase in GIR was also a result of) the BSP’s net foreign exchange operations, net income from the BSP’s investments abroad, and the National Government’s (NG) net foreign currency deposits with the BSP,” it added.
The BSP said the GIR as of end-July represents a more than adequate external liquidity buffer equivalent to 7.4 months’ worth of imports of goods and payments of services and primary income.
It added that the GIR is also 5.9 times the country’s short-term external debt based on original maturity and 4.1 times based on residual maturity.
Short-term debt, BSP said, is based on residual maturity which 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 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.
Meanwhile, the net international reserves, which refers to the difference between the BSP’s reserve assets and reserve liabilities, increased by $0.3 billion to $99.7 billion as of end-July 2023 from the end-June 2023 level of $99.4 billion.
BSP’s reserve assets is represented by the GIR while reserve liabilities are short-term foreign debt and credit and loans from the International Monetary Fund (IMF).###