The Market Monitor Minding the Nation's Business
The Philippines’ gross international reserves (GIR) declined to $104.6 billion at the end of April 2025, according to preliminary figures released by the Bangko Sentral ng Pilipinas (BSP) last week.
This marked a drop from the end-March level of $106.7 billion. GIR, which consists of foreign currency assets such as securities, monetary gold, and foreign exchange, serves as the country’s financial shield against external shocks.
“The month-on-month decrease in the GIR level reflected mainly the national government’s (NG) drawdowns on its foreign currency deposits with the Bangko Sentral ng Pilipinas (BSP) to meet its external debt obligations and pay for its various expenditures, and BSP’s net foreign exchange operations,” the central bank explained.
Despite the decrease, the BSP emphasized that the current reserve level remains a “robust external liquidity buffer,” capable of covering 7.2 months’ worth of imports and payments for services and primary income.
“Moreover, it covers about 3.6 times the country’s short-term external debt based on residual maturity,” the BSP added, noting that the GIR remains well above the adequacy threshold of three months’ worth of import cover.
Rizal Commercial Banking Corporation Chief Economist Michael Ricafort also noted the continued strength of the country’s external position.
In a statement, Ricafort said the GIR staying above the $100-billion mark for the 19th consecutive month since October 2023 is “still a good signal, on the country’s strong external position that could help stabilize the peso exchange rate and support the country’s favorable credit ratings of 1-3 notches above the minimum investment grade in recent years despite the pandemic.”
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Phl debt at P16.68-T but remains manageable
The Bureau of the Treasury (BTr) on Wednesday assured that the national government’s outstanding debt remains within manageable levels, with the total reaching P16.68 trillion as of end-March 2025.
Of the total debt stock, domestic borrowings made up P11.38 trillion or 68.2 percent, while P5.30 trillion or 31.8 percent came from external sources. The current mix, the BTr said, helps balance financing strategies by limiting exposure to external shocks and leveraging the liquidity of the local market.
“The NG’s robust revenue performance in Q1 (first quarter) 2025 has enabled the government to finance key priority programs without imposing new taxes, keeping debt growth well within sustainable levels,” the agency said.
The BTr emphasized that continued economic growth has outpaced the increase in debt, reinforcing efforts toward long-term fiscal consolidation.
“With the economy continuing to grow faster than its obligations, the country remains firmly on track to achieve fiscal consolidation and reduce the debt-to-GDP ratio to below 60 percent by 2028,” it added.
Investor confidence, reflected in recent credit rating upgrades and affirmations, has supported strong demand for government securities, the BTr said. This has helped the administration sustain affordable borrowing costs while driving inclusive development.
The current administration inherited a P12.79 trillion debt stock due to pandemic-era borrowing. However, the BTr highlighted that it has since reduced the debt-to-GDP ratio to 60.7 percent in 2024, below the international risk threshold of 70 percent, by growing the country’s gross domestic product to P26.44 trillion that year.
The government’s Medium-Term Fiscal Framework (MTFF) aims to bring the debt ratio further down to 56.9 percent by the end of 2028.