Philippine foreign reserves up to $108.54 billion as of end-March

The Philippines’ foreign currency reserves increased as of end-March this year as the national government increased its foreign currency deposit with the central bank, the Bangko Sentral ng Pilipinas (BSP) said Friday.

Preliminary BSP data showed the country’s gross international reserves (GIR) level — a measure of a country's ability to settle import payments and service foreign debt — as of end-March stood at $108.54 billion from $107.8 billion as of end-February.

The central bank’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 increase in the GIR level reflected mainly the national government’s (NG) net foreign currency deposits with the BSP, which include proceeds from its issuance of ROP (Republic of the Philippines) Global Bonds, and the BSP’s net income from its investments abroad,” the BSP said.

The latest GIR level represents a more than adequate external liquidity buffer equivalent to 9.6 months’ worth of imports of goods and payments of services and primary income, according to the central bank.

By convention, 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 end-March GIR level is also about 7.2 times the country’s short-term external debt based on original maturity and 5.4 times based on residual maturity.

Short-term debt based on residual maturity refers to outstanding external debt with an 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% cover for the payment of the country’s foreign liabilities, public and private, falling due within the immediate twelve-month period, according to the BSP.

Likewise, the net international reserves (NIR), which refers to the difference between the BSP’s reserve assets (GIR) and reserve liabilities - short-term foreign debt and credit and loans from the International Monetary Fund - increased by $740 million to $108.53 billion as of end-March from the end-February level of $107.79 billion. — DVM, GMA News