THE increase in gold prices in the international market boosted the country’s dollar reserves as of the end of November 2023, according to the Bangko Sentral ng Pilipinas (BSP).
Based on the data, the country’s gross international reserves (GIR) rose to $101.3 billion as of end-November 2023 from the end-October 2023 level of $101 billion.
This was the highest in seven months or since the $101.76 billion GIR posted by the country as of the end of April this year.
“The month-on-month increase in the GIR level reflected mainly the upward valuation adjustments in the value of the Bangko Sentral ng Pilipinas’ [BSP] gold holdings due to the increase in the price of gold in the international market, and the BSP’s net income from its investments abroad,” BSP said.
The data showed the country’s gold holdings reached $10.82 billion as of the end of November 2023. This was the highest since the $11.61 billion posted in December 2020.
“The BSP’s reserve assets consist of foreign investments, gold, foreign exchange, reserve position in the IMF, and special drawing rights,” BSP explained.
The data also showed the country’s latest GIR level represents a more than adequate external liquidity buffer equivalent to 7.5 months’ worth of imports of goods and payments of services and primary income.
BSP said that the GIR is considered 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, it is also about 5.8 times the country’s short-term external debt based on original maturity and 3.6 times based on residual maturity.
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.
Meanwhile, data showed the net international reserves increased by $0.2 billion to $100.5 billion as of end-November 2023 from the end-October 2023 level of $100.3 billion.
The net international reserves refer to the difference between the BSP’s reserve assets or GIR and reserve liabilities.
Overall, 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.
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