Philippines’ gross international reserves climb to record-high $112 billion

The Philippines' gross international reserves (GIR) reached a record high of $112 billion at the end of September 2024, surpassing the previous peak of $110.12 billion set in December 2020.

The increase was driven by factors such as foreign borrowings by the Marcos administration and higher gold prices.

The Bangko Sentral ng Pilipinas (BSP) said the current GIR level provides ample external liquidity, covering 8.1 months of imports and payments. The central bank considers a GIR adequate if it can finance at least three months of a country's imports and related payments.

In addition to import coverage, the GIR is about 6.3 times larger than the country's short-term external debt based on original maturity and 4.4 times larger based on residual maturity. The BSP considers the reserve level adequate if it provides 100% coverage for all public and private foreign liabilities due within a year.

The recent increase in the GIR mainly stems from the national government's net foreign currency deposits, including proceeds from global bond issuances. Higher gold prices also boosted the value of the BSP's gold holdings, and the central bank earned income from its investments abroad.

The BSP's reserve assets include foreign investments, gold, foreign exchange, its reserve position in the International Monetary Fund (IMF), and special drawing rights. As of the end of September 2024, the BSP's foreign investments amounted to $94.5 billion, while its gold holdings were valued at $10.9 million.

Net international reserves (NIR), which refer to the difference between the BSP's reserve assets and reserve liabilities, rose by $4.2 billion in September to reach $112 billion.