THE country’s Gross International Reserves (GIR) as of end-May fell by $500 million to $101.3 billion from $101.8 billion, according to the Bangko Sentral ng Pilipinas (BSP).
“The month-on-month decrease in the GIR level reflected mainly the National Government’s [NG] net foreign currency withdrawals from its deposits with the BSP to settle its foreign currency debt obligations and pay for its various expenditures, and downward adjustments in the value of the BSP’s gold holdings due to the decrease in the price of gold in the international market,” the BSP said in a statement on Wednesday.
Likewise, the country’s latest GIR record was 2.22 percent lower than the $103.6 billion level registered in end-May last year, BSP data showed.
The BSP’s reserve assets consist of foreign investments, gold, foreign exchange, reserve position in the International Monetary Fund (IMF), and special drawing rights.
The BSP said the latest GIR level represents a more-than-adequate external liquidity buffer equivalent to 7.6 months’ worth of imports of goods and payments of services and primary income.
The BSP explained that 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.”
Moreover, the country’s GIR is also about 5.9 times the country’s short-term external debt based on original maturity and 4.2 times based on residual maturity, according to the BSP.
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.
“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,” the BSP said.
Meanwhile, the net international reserves, which refers to the difference between the BSP’s reserve assets (GIR) and reserve liabilities or short-term foreign debt and credit and loans from the IMF, decreased by $0.4 billion to $101.3 billion as of end-May from the end-April 2023 level of $101.7 billion.
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