Phl foreign reserves stay strong despite drop

The country’s external financial position remains stable even after a month-on-month decline in foreign reserves, according to the Bangko Sentral ng Pilipinas (BSP).

Latest preliminary data released last week showed that gross international reserves (GIR) stood at $107.5 billion in March, down from $113.3 billion in February.

The GIR is composed of foreign-denominated securities, foreign exchange holdings, gold assets, and other external reserves that serve as the country’s financial buffer against global shocks.

Despite the decline, the BSP said the reserve level remains “healthy” and provides strong external liquidity protection for the economy.

The reserves are sufficient to cover 7.1 months’ worth of imports of goods and payments for services and primary income, well above the internationally accepted adequacy benchmark of at least three months.

It also covers about 3.9 times the country’s short-term external debt based on residual maturity, indicating a comfortable ability to meet near-term foreign obligations.

The BSP reiterated that gross international reserves are critical in helping stabilize the peso, support import payments, and ensure the country can service its foreign debt during periods of global volatility.