The Philippines' foreign currency reserves dipped to a nine-month low in January 2025 due to a combination of factors, including the central bank's foreign exchange interventions and the national government's debt payments. Despite the decline, the BSP maintains that reserves remain ample, exceeding the minimum required level.
The Philippines' foreign currency reserves reached a nine-month low in January 2025, declining due to the central bank 's foreign exchange interventions and the national government's debt payments . Preliminary data released by the Bangko Sentral ng Pilipinas (BSP) revealed that gross international reserves (GIR) amounted to $103.021 billion as of the end of January, down from $106.256 billion recorded in December 2024. This marks the lowest level since April 2024, when GIR stood at $102.
647 billion. The central bank attributed the month-on-month decrease in GIR primarily to the BSP's net foreign exchange operations and the national government's utilization of its deposits with the BSP to settle foreign currency debt obligations. Rizal Commercial Banking Corp. Chief Economist Michael Ricafort further pointed to foreign debt maturities, government expenditures incurred in foreign currency, and the BSP's interventions aimed at managing volatility in the US dollar-peso exchange rate as contributing factors to the decline.Despite the drop, the BSP emphasized that reserves remain more than adequate, comfortably covering 7.3 months' worth of imports and external payments. This level surpasses the three-month minimum conventionally considered sufficient. Additionally, the GIR is 3.6 times the country's short-term external debt based on residual maturity. The BSP's reserve assets encompass foreign investments, gold, foreign exchange, IMF reserve positions, and special drawing rights. In a related development, net international reserves (NIR), which represents the difference between GIR and the BSP's reserve liabilities, also decreased by $3.2 billion to $103.0 billion from $106.2 billion in December.
FOREIGN RESERVES PHILIPPINES CENTRAL BANK DEBT PAYMENTS INFLATION
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