Philippines' foreign exchange reserves grow to record $93.29B in end-May

The Philippines' foreign exchange reserves grew by $2.35 billion in end-May, driven mainly by the increase in deposits of the national government from its bonds issuance.

According to data released by the Bangko Sentral ng Pilipinas (BSP) on Tuesday, the gross international reserves (GIR) grew to a record $93.29 billion as of end-May.

This compares with the $90.94 billion in end-April, and the $85.02 billion as of end-May 2019.

The central bank attributed the increase to the inflows from the national government's foreign currency deposits with the BSP of the proceeds from its issuance of the Republic of the Philippines (ROP) bonds.

Inflows also came from the BSP's foreign exchange operations.

The BSP noted, however, that inflows were partly offset by the foreign currency withdrawals made by the national government to pay its foreign currency debt obligations.

"The hefty level of GIR represents an external liquidity buffer which can cushion the domestic economy against external shocks," the BSP said.

"Specifically, it ensures availability of foreign exchange to meet balance of payments financing needs such as for payment of imports and debt service, in extreme conditions when there are no export earnings or foreign loans," it added.

The latest GIR is equivalent to 8.4 months' worth of imports of goods and payments of services and primary income.

It can also cover 7 times the country's short-term external debt based on original maturity, and 4.6 times based on residual maturity.

BSP Governor Benjamin Diokno last month said the GIR was expected to reach a record-high of $94 billion by the end of 2020.