THE income generated from the investments made by Bangko Sentral ng Pilipinas (BSP) abroad boosted the country’s Gross International Reserves (GIR) at the end of August 2024.
BSP data showed the country’s GIR increased to $106.9 billion as of the end of August 2024, marking the 11th consecutive month that the country’s dollar reserves were above $100 billion.
The GIR at the end of August is also the highest GIR level for the year and is only $2 billion away from the full-year 2021 level of $108.79 billion, the highest in 20 years.
“The month-on-month increase in the GIR level reflected mainly the net income from the Bangko Sentral ng Pilipinas’ [BSP] investments abroad,” BSP said.
It can be noted that Foreign Investments made by BSP reached $91.41 billion, the highest since the $91.62 billion posted as of the end of 2021.
Rizal Commercial Banking Corporation Chief Economic Michael L. Ricafort said the latest GIR figure is “a good signal” and was also brought about by the OFW remittances, Business Process Outsourcing revenues, foreign tourism receipts, and exports foreign investments, among others.
The BSP said the latest GIR level represented an external liquidity buffer equivalent to 7.9 months’ 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.
The GIR is also estimated to be 6.1 times the country’s short-term external debt based on original maturity and 3.7 times based on residual maturity.
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.
Further, 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 (GIR) and reserve liabilities, increased by $0.2 billion to $106.9 billion as of end-August 2024 from the end-July 2024 level of $106.7 billion.
Reserve liabilities, BSP said, are short-term foreign debt and credit and loans from the International Monetary Fund (IMF).
