MANILA – The Philippines’ gross international reserves (GIR) shrunk to a six-year low in June due to outflows related to Bangko Sentral ng Pilipinas’ foreign exchange operations, the central bank said Friday.
Preliminary data from the BSP showed that the GIR level slid to $77.68 billion as of end-June 2018 from $79.2 billion as of end-May 2018, compared with $81.32 billion as of end-June 2017.
It was the lowest GIR level since February 2012, when foreign reserves totaled $77.01 billion.
“The month-on-month decline in the GIR level was due mainly to outflows arising from the foreign exchange operations of the BSP, revaluation adjustments on the BSP’s gold holdings resulting from the decrease in the price of gold in the international market, and payments made by the national government for its maturing foreign exchange obligations,” BSP governor Nestor Espenilla Jr. said.
“These were partially tempered by the national government’s net foreign currency deposits as well as the BSP’s income from its investments abroad,” Espenilla noted in a statement.
The GIR is a measure of a country’s ability to settle import payments and service foreign debt.
“At this level, the GIR nonetheless continues to serve as an ample external liquidity buffer and is equivalent to 7.5 months’ worth of imports of goods and payments of services and primary income,” according to the central bank chief.
The end-June foreign reserves is also equivalent to 6 times the country’s short-term external debt based on original maturity and 4.1 times based on residual maturity.
Net international reserves or the difference between the BSP’s GIR and total short-term liabilities likewise shrunk by $1.53 billion to $77.65 billion as of end-June 2018, from $79.18 billion as of end-May. (GMA News)
