Forex reserves dip to $104.6 billion in April

MANILA, Philippines — The country’s gross international reserves (GIR) fell to $104.6 billion in April as the government withdrew from its foreign currency deposits with the Bangko Sentral ng Pilipinas (BSP) to meet external debt obligations and fund various expenditures.

Based on BSP data, the country’s dollar reserves went down by two percent from the $106.7 billion recorded in March, marking the lowest level since January 2025, when reserves stood at $103.3 billion.

Compared to a year ago, the April GIR level was slightly higher by $870 million or 0.8 percent from last year’s $103.8 billion.

“The month-on-month decrease in the GIR level reflected mainly the national government’s drawdowns on its foreign currency deposits with the BSP to meet its external debt obligations and pay for its various expenditures,” the central bank said.

The BSP’s foreign investments decreased by 3.2 percent to $86.09 billion in April from $88.92 billion a month ago. The figure was also slightly lower than the $87.13 billion recorded a year ago.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the decline in foreign investments came amid heightened global market volatility triggered by renewed concerns over US President Donald Trump’s policies.

Ricafort cited the so-called “Liberation Day” on April 2, marked by the imposition of reciprocal tariffs, as a key risk event that rattled investor sentiment, led to sell-offs in US financial markets and increased fears of a potential US recession.

In the coming months, Ricafort said the GIR would likely remain supported by steady dollar inflows from remittances, outsourcing revenues, export and record-high earnings from foreign tourism.

But these could be offset by the country’s still-wide trade deficit, foreign debt payments and plans to reduce reliance on foreign borrowings to manage currency risks.

Meanwhile, the country’s foreign exchange holdings rose by 23.5 percent to $648.6 million from $525.1 million, while the value of the central bank’s gold holdings went up by 4.5 percent to $13.33 billion from $12.76 billion.

The GIR is the sum of all foreign exchange flowing into the country and serves as  buffer to ensure that it will not run out of foreign exchange that it can use in the event of an economic downturn.

Despite the decrease, the BSP said  the country’s dollar reserves remain  healthy as they are enough to cover 7.2 months’ worth of imports and payments for services and primary income. The latest GIR level also covers 3.6 times the country’s short-term external debt based on residual maturity.

By convention, the country’s dollar reserves are viewed to be adequate if they can finance at least three months’ worth of the country’s imports of goods and payments of services and primary income.

The buffer is also 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 12-month period.