Dollar reserves climb to $105.9 billion in August

MANILA, Philippines — The country’s foreign exchange buffer inched higher in August, boosted by rising gold prices and earnings from the Bangko Sentral ng Pilipinas (BSP)’s investments abroad.

Preliminary central bank data showed the country’s gross international reserves (GIR) rose to $105.9 billion as of end-August, up by 0.5 percent from $105.4 billion as of end-July.

“The Philippines’ GIR rose in August due to higher global gold prices and income from BSP’s investments,” the BSP said in a statement.

The GIR is composed of foreign exchange, foreign-denominated securities and gold holdings. Authorities use the GIR as a measure of the economy’s resilience, as it allows the country to service its foreign obligations, stabilize the peso and provide a safeguard against external shocks.

Based on the data, BSP’s foreign investments decreased by 0.4 percent to $85.85 billion in August from $86.19 billion a month ago. It was also seven percent lower than the $92.27 billion recorded a year ago.

Foreign exchange holdings rose by 8.3 percent to $897.8 million from $828.9 million, while the value of the central bank’s gold holdings went up by 5.4 percent to $14.52 billion from $13.78 billion in July.

The reserve level is enough to cover 7.2 months’ worth of imports of goods and payments of services and primary income, well above the three-month benchmark viewed as adequate by international standards.

It also provides about 3.4 times the country’s short-term external debt based on residual maturity.

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.

Similarly, the BSP said net international reserves, or the difference between reserve assets and liabilities, expanded by 0.5 percent to $105.9 billion in August from $105.4 billion in July.

The BSP expects the country’s dollar reserves to hit $104 billion this year and $105 billion in 2026.