The gross international reserves settled at $108.89 billion at the end of December 2021, up $1.17 billion from the previous month but lower than the end-2020 figure of $110.11 billion, preliminary data from the Bangko Sentral ng Pilipinas show.
The figure missed the GIR target of $111 billion set by the BSP for end-2021. The BSP’s reserve assets consist of foreign investments, gold, foreign exchange, reserve position in the IMF and special drawing rights.
The GIR historically rises in December on the back of higher remittances from overseas Filipino workers during the holidays.
“The latest GIR level represents a more than adequate external liquidity buffer equivalent to 10.3 months’ worth of imports of goods and payments of services and primary income,” the BSP said in a statement.
The GIR is viewed as adequate if it can finance at least three months’ worth of imports of goods and payments of services and primary income.
It is also about 8.8 times the country’s short-term external debt based on original maturity and 5.9 times based on residual maturity. In a given period, the GIR is 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 twelve-month period.
Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.
The BSP’s foreign investments reached $91.75 billion in December, up from $91.50 billion in November. Gold holdings also went up to $9.33 billion from $9.0 billion, while the special drawing rights were maintained at $3.94 billion.
The BSP said the month-on-month increase in the GIR level reflected mainly the national government’s net foreign currency deposits with the BSP and upward adjustment in the value of the BSP’s gold holdings due to the increase in the price of gold in the international market.
The net international reserves, which refer to the difference between the BSP’s reserve assets and reserve liabilities, increased $1.19 billion to $108.89 billion as of end-December from the end-November 2021 level of $107.7 billion.
The BSP earlier reduced its GIR forecast for 2021 to $111 billion from the previous projection of $114 billion, taking into account the uncertain global environment amid the lingering pandemic.
It hit a record $110.1 billion in December 2020. The full-year tally exceeded the BSP’s forecast of $105 billion for the year.