Gross international reserves slip to $105.7B in July

THE PHILIPPINES' gross international reserves (GIR) slipped in July amid lower gold prices and as the government paid back more of its foreign debt, preliminary data from the central bank showed.

- Luisa Maria Jacinta C. Jocson

The Bangko Sentral ng Pilipinas (BSP) on Thursday reported that dollar reserves dipped by 0.3% to $105.7 billion as of end-July from $106 billion as of end-June.

Year on year, the GIR inched down by 1% from $106.74 billion.

The central bank said the decline was mainly due to "lower global gold prices and the National Government's drawdowns on its foreign currency deposits with the BSP to service external debt obligations."

Ample foreign exchange buffers protect the country from market volatility and ensure that it is capable of paying its debts in the event of an economic downturn.

The central bank said the latest GIR provides "a robust external liquidity buffer."

The level of dollar reserves as of end-July is enough to cover about 3.4 times the country's short-term external debt based on residual maturity.

It is also equivalent to 7.2 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 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."