Dollar reserves dwindle to 16-month low in May

MANILA, Philippines — The country’s dollar reserves fell to $103.97 billion as of end-May 2026 – the lowest level in 16 months – as government debt payments, lower gold prices and central bank foreign exchange operations weighed on the country’s external buffers.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed that gross international reserves declined by 0.3 percent from $104.33 billion in April. The GIR was also lower by 1.2 percent compared to $105.18 billion a year ago.

The BSP said the month-on-month decline was mainly driven by the national government’s drawdowns on its foreign currency deposits with the central bank for external debt service.

The decrease was also due to downward valuation adjustments in the BSP’s gold holdings amid lower global gold prices and the BSP’s net foreign exchange operations.

Broken down, gold holdings slipped by 1.5 percent to $19.48 billion in May from $19.78 billion in April. Despite the monthly drop, gold holdings remained 42 percent higher year on year amid elevated bullion prices over the past 12 months.

Foreign investments, which make up the largest share of reserves, also eased to $79.25 billion from $79.4 billion a month earlier. Meanwhile, the country’s reserve position in the International Monetary Fund declined to $712.2 million from $723.6 million.

Partly offsetting these declines was an increase in foreign currency deposits, which rose to $583 million in May from $469 million in April. Special drawing rights stood at $3.95 billion.

The BSP said the reserve level continues to provide a “robust external liquidity buffer.”

The latest GIR level was equivalent to 6.9 months’ worth of imports of goods and payments of services and primary income, while also covering about 3.6 times the country’s short-term external debt based on residual maturity.

GIR consists of eligible foreign assets such as securities, deposits and gold. According to the BSP, these reserves help ensure sufficient foreign currency liquidity to meet import requirements, service external debt obligations, address currency volatility and provide a buffer against external economic shocks.

By international convention, reserves are considered adequate if they can finance at least three months of imports. At its current level, the country’s reserve stock remains well above that benchmark despite the recent decline.

The BSP expects the country’s GIR to reach $111 billion this year and $112 billion in 2027.