October 13, 2021 at 07:45 pm
Julito G. Rada
The country’s gross international reserves declined to $107.16 billion as of end-September from $107.96 billion in August, following the government’s payment of foreign debt, the Bangko Sentral ng Pilipinas said Wednesday.
It said that despite the decrease, the latest GIR level represented a more than adequate external liquidity buffer, equivalent to 10.8 months’ worth of imports of goods and payments of services and primary income.
It is also about 7.6 times the country’s short-term external debt based on original maturity and 5.2 times based on residual maturity.
“The month-on-month decrease in the GIR level was attributed mainly to the debt service payment of the national government’s foreign currency debt obligations and downward adjustment in the value of the BSP’s gold holdings due to the decrease in the price of gold in the international market,” the BSP said in a statement.
The net international reserves, the difference between the GIR and total short-term liabilities, also decreased to $107.15 billion as of end-September from $107.96 billion in August.
Data showed that on a year-on-year basis, the GIR level climbed from $100.44 billion in September 2020. The GIR peaked at $110.11 billion in December 2020.
The BSP expects GIR to increase further to $114 billion by December 2021.
The GIR represents liquidity buffer against external payments and arises from persistent balance of payments of surplus.
A strong GIR position allows the central bank to manage foreign exchange fluctuations, thereby contributing to financial stability.