Dollar reserves hit $108.8 billion in September

MANILA, Philippines — The country’s foreign exchange buffer climbed for a second straight month to $108.8 billion as of end-September, driven by higher global gold prices and income from Bangko Sentral ng Pilipinas investments.

Preliminary data from BSP showed that gross international reserves (GIR) rose from $107.1 billion in August, marking the highest level since October 2024, when reserves stood at $111.1 billion.

The central bank said the increase in reserves was “due to higher global gold prices, income from the BSP’s investments abroad and foreign currency deposits by the national government with the BSP.”

GIR, which consists of foreign-denominated securities, foreign exchange and other reserve assets such as gold, serve as a key measure of the country’s ability to meet external obligations and shield the economy from external shocks.

BSP data showed that the value of the central bank’s gold holdings jumped by 12.8 percent to $16.38 billion in September from $14.52 billion in August.

The BSP’s foreign investments inched up to $87.24 billion in September from $86.99 billion in August, making up the bulk of the country’s foreign exchange reserves.

According to the BSP, the GIR level was equivalent to 7.3 months’ worth of imports of goods and payments of services and primary income. It was also enough to cover about 3.6 times the country’s short-term external debt based on residual maturity.

“The latest GIR level ensures availability of foreign exchange to meet balance of payments financing needs, such as for payment of imports and debt service, in extreme conditions when there are no export earnings or foreign loans,” the BSP said.

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

It 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.

After declining to $96.15 billion in 2022, the country’s foreign exchange buffer picked up to $103.75 billion in 2023 and rose further to $106.26 billion in 2024.

The BSP expects the country’s dollar reserves to hit $105 billion this year and $106 billion in 2026.