The Philippines’ gross international reserves (GIR) increased further to $108.54 billion as of end-March from $107.98 billion a month earlier, preliminary data at the Bangko Sentral ng Pilipinas (BSP) show.
The BSP’s reserve assets— comprising of foreign investments, gold, foreign exchange, reserve position in the International Monetary Fund and special drawing rights—continued to represent a more than adequate external liquidity buffer, the regulator said in a statement.
The latest GIR level is equivalent to 9.6 months’ worth of imports of goods and payments of services and primary income. Such reserves are considered adequate if they can cover at least three-months’ worth.
Further, end-March GIR was about 7.2 times the country’s short-term external debt based on original maturity and 5.4 times based on residual maturity.
The numbers suggest that BSP’s buffer has narrowed slightly compared to end-February when GIR was equivalent to 10.2 months of imports and primary income, 8.4 times the country’s short-term external debt based on original maturity and 5.8 times based on residual maturity.
“The month-on-month [March over February] increase in the GIR level reflected mainly the national government’s net foreign currency deposits with the BSP, which include proceeds from its issuance of global bonds, and the BSP’s net income from its investments abroad,” the regulator said.
Also, the BSP said its net international reserves (NIR) —the difference between the GIR and reserve liabilities—increased again to $108.53 billion at the end of March from $107.79 billion at the end of February.
Reserve liabilities refer to short-term foreign debt and credit and loans from the International Monetary Fund.
Earlier this week, BSP Governor Benjamin Diokno said the country’s strong external position continued to be a key credit strength as it inspires investor confidence.
Helping maintain this strength are remittances from overseas Filipino workers, which reached a record $34.9 billion in 2021 and expected to continue growing by 4 percent this year and next year.
In addition, Diokno said, the business process outsourcing (BPO) industry remains a steady source of foreign exchange, with BPO receipts growing by 9.5 percent in 2021.
At the same time, net inflows of foreign direct investments increased by 54 percent to $10.5 billion.
Part of the BSP’s strategy of managing its reserve assets is to increase its investment in “green” bonds, such as a series issued by the Bank of International Settlements (BIS).
From an initial $150-million investment in the maiden issue dubbed BIS Investment Pool (BISIP) G1, the BSP has added $200 million twice to bring the total to $550 million.
The BSP has also signed up for additional purchases through the BISIP G3, which was announced in February but which BSP officials said was still undergoing “portfolio construction.”
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