Philippine reserves fall to USD 100 billion in September

The Philippines’ gross international reserves fell to a preliminary USD 100 billion at the end of September 2026 as central bank foreign exchange operations, valuation adjustments and government withdrawals reduced the country’s stock of foreign currency assets.

The reserve level remains sufficient to cover 6.3 months of imports of goods and payments for services and primary income, giving the economy a sizable buffer against external shocks despite the decline.

The Bangko Sentral ng Pilipinas said the reserves could also cover about 3.2 times the country’s short-term external debt based on residual maturity.

The size of the reserve buffer matters to households and businesses because sufficient foreign currency holdings help the country pay for imports and external obligations and provide authorities with room to respond to financial-market volatility.

Reserves are particularly important for an import-dependent economy because sharp currency depreciation can make imported fuel, food, raw materials and other goods more expensive.

The September level was down from USD 104.85 billion in August, a decline of about USD 4.85 billion or 4.6% in one month.

It was also below the USD 109.06 billion recorded at the end of September 2025.

The BSP attributed the latest decline partly to its net foreign exchange operations.

Downward valuation adjustments also reduced the reserve level, mainly reflecting changes in the prices of the BSP’s gold holdings and foreign currency-denominated reserve assets.

The national government’s drawdowns on its foreign currency deposits with the central bank to service external debt contributed to the decrease.

Net foreign currency withdrawals by the national government from its BSP deposits were another factor.

Preliminary BSP data showed the September reserve stock stood at USD 99.997 billion before rounding to USD 100 billion.

Securities remained the largest reserve component at USD 64.44 billion as of end-September.

The BSP’s gold holdings were valued at USD 17.82 billion.

Other reserve assets stood at about USD 10 billion.

Special drawing rights amounted to USD 3.93 billion, while currency and deposits totaled USD 3.08 billion.

The Philippines’ reserve position in the International Monetary Fund stood at USD 723.1 million.

The 6.3-month import cover in September was lower than 6.6 months in August and 7.3 months at the end of 2025.

Short-term external debt coverage based on residual maturity similarly eased to 315.7% in September from 331.4% in August and 405.8% at the end of 2025.

Short-term debt based on residual maturity includes external debt originally due within one year as well as principal payments on medium- and long-term public and private sector foreign loans falling due over the next 12 months.

Gross international reserves consist of eligible foreign assets held by the BSP, including securities, foreign currency and deposits, gold, special drawing rights, the country’s reserve position in the IMF and other reserve assets.

The decline comes as domestic inflation accelerated to 7.2% in September from 6.1% in August, driven mainly by higher food and energy prices.

Inflation for households in the lowest 30% income group rose even faster to 9%, adding pressure on household budgets.

While inflation and international reserves measure different parts of the economy, maintaining an adequate foreign exchange buffer becomes more important when the country faces volatile global energy prices, external financial shocks and other developments that can put pressure on the peso and import costs.

The BSP has said it remains vigilant over developments in the Middle East and weather disturbances as it assesses risks to inflation and economic growth.