Forex reserves rise to 1-year high in October

MANILA, Philippines — The country’s foreign exchange reserves rose slightly to $109.7 billion as of end-October from $109.1 billion a month earlier, providing a steady cushion against external shocks, the Bangko Sentral ng Pilipinas (BSP) said.

Based on preliminary central bank data, the country’s gross international reserves (GIR) marked the highest level in a year or since the $111.08 billion recorded in October 2024.

The BSP said the higher GIR level continues to provide a “robust external liquidity buffer,” enough to cover 7.3 months’ worth of imports of goods and payments of services and primary income.

The buffer also represents about 3.7 times the country’s short-term external debt based on residual maturity.

By international standards, reserves are considered adequate if they can finance at least three months of imports and fully cover short-term foreign liabilities due within a year.

The GIR consist of foreign-denominated securities, foreign exchange and other reserve assets such as gold. These assets help the country finance imports and debt obligations, stabilize the peso as well as cushion the economy from external market volatility.

“The month-on-month increase in GIR was largely due to the $506 million rise in gold holdings amid new record-high world gold prices during the month,” Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said.

He also noted that October marked the fourth increase in GIR in five months after declines for most months since late 2024, when heightened global uncertainties such as the “Trump factor” weighed on markets.

Ricafort said the sustained high reserves could continue to support the peso, bolster the country’s external position and help maintain its strong investment-grade credit ratings.

He added that the reserves could move closer to new record highs in the coming months as these inflows remain steady.