The gross international reserves (GIR), an indication of a country’s capacity to pay for maturing foreign debt and trade obligations, stood marginally lower in August to $99.8 billion from only $99.9 billion in July, the Bangko Sentral ng Pilipinas (BSP) said on Thursday.
This proved more than some forecasts indicating the GIR at around $99.2 billion.
According to the BSP, the moderating level of foreign currency reserves for the period resulted from payments the national government (NG) made on its foreign currency obligations and on adjustments the BSP made relative to its gold holdings who global value diminished during the month.
Gold prices started the year at $1,830.10 per gram but has traded 6 percent higher since then and forecast to end the year at around $1,985 per gram.
The country’s gold reserves actually increased from 159.84 tons in the second quarter from only $157.72 tons a quarter earlier.
Nevertheless, the BSP said the country’s foreign currency reserves are more than adequate reserves to pay for 7.4 months worth of imports of goods and payments of services and primary income. The global standard for adequacy of foreign currency reserves is only three months.
Such reserves have never been lower than $15 billion since 2000 and has stood at an all-time high of $108.79 billion as recently as 2021.
There was a point in the country’s monetary past when the GIR was as low as only $200 million and the then Central Bank of the Philippines, the BSP’s predecessor, struggled whether to finance the purchase of imported oil to feed the country’s factories and power plants or use the reserves for the purchase of infant formula to feed the hungry newborn.
