Down from US$99.8 billion as of end of July, due to gov’t’s foreign currency withdrawals, lowered value of BSP gold holdings
(File photo of the Bangko Sentral ng Pilipinas)
(Eagle News) — The Philippines gross international reserves (GIR) level settled at US$99 billion as of end of August 2022, the Bangko Sentral ng Pilipinas (BSP) said.
This was a decrease from the end-July 2022 GIR level of US$99.8 billion.
-Still more than adequate external liquiduty buffer, says BSP-
But the BSP said that this latest GIR level “represents a more than adequate external liquidity buffer equivalent to 8.3 months’ worth of imports of goods and payments of services and primary income.”
“Moreover, it is also about 7.1 times the country’s short-term external debt based on original maturity and 4.6 times based on residual maturity,” it said in a statement on Wednesday, September 7.
-Effect of gov’t foreign currency withdrawals, downward adjustment of BSP gold holdings-
“The month-on-month decrease in the GIR level reflected mainly the National Government’s (NG) foreign currency withdrawals from its deposits with the BSP to settle its foreign currency debt obligations and pay for its various expenditures, and the downward adjustment in the value of the BSP’s gold holdings due to the decrease in the price of gold in the international market,” the BSP explained.
“Similarly, the net international reserves (NIR), which refers to the difference between the BSP’s reserve assets (GIR) and reserve liabilities (short-term foreign debt and credit and loans from the International Monetary Fund), decreased by US$0.8 billion to US$99 billion as of end-August 2022 from the end-July 2022 level of US$99.8 billion,” it added.
The BSP explained that the gross international reserves (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 level of GIR, as of a particular period, is considered adequate, if it provides at least 100 percent cover for the payment of the country’s foreign liabilities, public and private, falling due within the immediate twelve-month period, it stressed.
(Eagle News Service)