THE government’s global bond issuance and income from the Bangko Sentral ng Pilipinas (BSP) investments abroad boosted the country’s Gross International Reserves (GIR) to the highest level in three years.
The BSP preliminary data showed the country’s GIR level rose to $104.48 billion as of end-May from $102.65 billion as of end-April 2024. This was the highest since the $108.79 billion posted at the end of 2021.
BSP data showed the GIR level at the end of May 2023 was at $100.59 billion.
“The month-on-month increase in the GIR level reflected mainly the National Government’s [NG] net foreign currency deposits with the Bangko Sentral ng Pilipinas [BSP], which include proceeds from its issuance of ROP Global Bonds, and net income from the BSP’s investments abroad,” the BSP explained.
The latest GIR level represents a more than adequate external liquidity buffer equivalent to 7.7 months’ worth of imports of goods and payments of services and primary income.
The BSP deems the GIR level 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 data also showed that the GIR was about 5.9 times the country’s short-term external debt based on original maturity and 3.6 times based on residual maturity.
According to the BSP, short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less.
This is on top of principal payments in the 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,” BSP added.
The BSP also said the country’s net international reserves increased by $1.87 billion to $104.46 billion as of end-May 2024 from the end-April 2024 level of $102.59 billion.
The net reserves refer to the difference between the BSP’s reserve assets (GIR) and reserve liabilities.
Reserve liabilities are short-term foreign debt and credit and loans from the International Monetary Fund (IMF).
