Philippine forex reserves hit three-month low in May

The Philippines’ dollar reserves fell to a three-month low in May as the national government withdrew from its deposits with the Bangko Sentral ng Pilipinas (BSP) to settle its debt obligations during the period.

Data released by the central bank on Thursday showed that gross international reserves (GIR) stood at $101.296 billion in May, lower than $101.760 billion in April and $103.646 billion in the same period a year ago.

This is the lowest in three months since the GIR — a measure of the ability to settle import payments and service foreign debt — hit $98.216 billion in February.

"The month-on-month decrease in the GIR level reflected mainly the national government’s 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.

The Bureau of the Treasury reported that the government’s running debt ballooned to a fresh record high of P13.911 trillion as of end-April. It has yet to release debt figures for the month of May.

Gold holdings declined to $10.208 billion from $10.238 billion the previous month and from $9.026 billion the same month in 2022.

According to the BSP, the May GIR level is equivalent to 7.6 months’ worth of imports of goods and payments of services and primary income.

It 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.

Meanwhile, net international reserves — the difference between the GIR and reserve liabilities — fell to $101.3 billion from $101.7 billion as of end-April. —VBL, GMA Integrated News