PH reserves rise to $106.7B in February 2025

The Philippines’ foreign currency reserves saw a recovery in February as the national government raised its deposits with the central bank following successes in fundraising efforts supported by the increase in the global prices of gold.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed that gross international reserves (GIR) —measure of the country's ability to settle import payments and service foreign debt— stood at $106.7 billion as of end-February, up from $103.3 billion in January.

“The month-on-month increase in the GIR level reflected mainly the national government’s net foreign currency deposits with the BSP, which include proceeds from its issuance of ROP Global Bonds, upward valuation adjustments in the BSP’s gold holdings due to the increase in the price of gold in the international market, and net income from the BSP’s investments abroad,” the central bank said,

In an emailed commentary, Rizal Commercial Banking Corp. chief economist Michael Ricafort said that the increase in GIR was “largely attributed to the proceeds of the $3.29 billion global bond/ROP bond issuance/sale by the national government in the latter part of January 2025, continued gains in gold holdings after world gold prices posted new record highs ($2,956 per ounce on February 24, 2025).”

The Philippines’ central bank reserve assets include foreign investments, gold, foreign exchange, IMF reserve positions, and special drawing rights.

The BSP said the 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.

By convention, 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.

The end-February reserves also represent about 3.8 times the country’s short-term external debt 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.

The level of GIR, as of a particular period, is considered adequate, if it provides at least 100% cover for the payment of the country’s foreign liabilities, public and private, falling due within the immediate 12-month period.

Meanwhile, net international reserves —the difference between GIR and the BSP’s reserve liabilities— rose by $3.4 billion to $106.6 billion as of end-February from the end-January level of $103.2 billion. —KG, GMA Integrated News