PHILIPPINE dollar reserves declined in December 2024 due mainly to net foreign exchange operations of the central bank and the decline in government deposits to pay off debt obligations, data released yesterday, January 7, showed.
Preliminary data released by the Bangko Sentral ng Pilipinas (BSP) yesterday showed that the gross international reserves (GIR) — a measure of the ability to settle import payments and service foreign debt — stood at $106.837 billion as of end-December 2024.
This is lower than the $108.488 billion as of end-November, but is higher than the $103.753 billion recorded in December 2023.
“The month-on-month decrease in the GIR level reflected mainly the Bangko Sentral ng Pilipinas’ net foreign exchange operations, drawdown on the national government’s deposits with the BSP to pay off its foreign currency debt obligations, and downward valuation adjustments in the BSP’s gold holdings due to the decrease in the price of gold in the international market,” the BSP said.
This comes as the peso was trading at the P58:$1 level for most of December, depreciating to the record-low P59:$1 on December 19, before ending the year at P57.89:$1. The central bank earlier said it lets the market dictate the movement of the peso against the dollar, but it intervenes when needed.
Latest data available show that the national government’s outstanding debt stood at P16.02 trillion as of end-October 2024, marking a 0.8% or P126.95-billion increase from the previous month, primarily driven by the peso depreciation.
According to the BSP, the latest GIR is equivalent to a liquidity buffer of 7.5 months’ worth of imports of goods and payments of services and primary income, and about 3.8 times the country’s short-term external debt based on residual maturity. (GMA Integrated News)
