PH foreign reserves drop to 16-month low in May 2026

The Philippines’ gross international reserves (GIR) declined to its lowest level in 16 months in May, data from the Bangko Sentral ng Pilipinas (BSP) showed Saturday.

The GIR — a measure of the ability to settle import payments and service foreign debt — stood at $103.937 billion last month, down from $104.328 billion in April 2026 and $105.176 billion in May 2025.

This is the lowest in over a year since the GIR stood at $103.271 billion in January 2025.

The BSP attributed the month-on-month decrease in the GIR to the following:

• National government’s drawdowns on its foreign currency deposits with the Bangko Sentral ng Pilipinas (BSP) for external debt service
• Downward valuation adjustments in the BSP’s gold holdings due to decline in global gold prices
• BSP’s net foreign exchange operations

“Despite the decline, this level still provides a robust external liquidity buffer, equivalent to 6.9 months’ worth of imports of goods and payments of services and primary income,” the central bank said.

By convention, 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.

The GIR level is deemed adequate if, as of a given period, it is at least equal to 100% of a country’s total short-term external debt—public and private—falling due within the next 12 months.

The BSP said the latest GIR level 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.

Moreover, the end-May 2026 GIR level also covers about 3.6 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.

Foreign reserves consist of “eligible foreign assets” such as securities and deposits, including gold. —VAL, GMA News