Philippine reserves stay adequate as BOP posts surplus

MANILA — The Philippines’ gross international reserves remained adequate at USD 104.0 billion as of end-May 2026, giving the country enough foreign currency to cover imports, service external debt, and cushion the economy from external shocks, the Bangko Sentral ng Pilipinas said.

The BSP said the revised GIR level consisted of eligible foreign assets held by the central bank, including securities, currency and deposits, reserve position in the fund, gold, special drawing rights, and other reserve assets.

The modest movement in reserves was mainly driven by the National Government’s drawdowns on its foreign currency deposits with the BSP for external debt service.

Downward valuation adjustments also weighed on reserves, primarily due to changes in the prices of the BSP’s gold holdings and foreign currency-denominated reserve assets.

The BSP’s net foreign exchange operations also affected the reserve level.

These factors were partly offset by the National Government’s net foreign currency deposits with the BSP.

The BSP’s net income from its investments abroad also helped cushion the movement in reserves.

At the end-May level, the country’s GIR could cover up to 6.7 months’ worth of imports of goods and payments of services and primary income.

The reserves could also service about 3.9 times the country’s short-term external debt based on residual maturity, equivalent to 385.4 percent in the BSP’s accompanying table.

The overall balance of payments, which captures the country’s transactions with the rest of the world, posted a USD 131 million surplus in May 2026.

The May surplus helped narrow the cumulative BOP deficit from USD 7.4 billion in January-April 2026 to USD 7.3 billion in January-May 2026.

The BSP data placed the year-to-date deficit at USD 7,411 million as of April and USD 7,280 million as of May.

The BSP said the year-to-date BOP position reflected the continued trade in goods deficit and net outflows from foreign portfolio investments.

These pressures were partly offset by sustained net inflows from personal remittances of overseas Filipinos, foreign borrowings by the National Government, trade in services, and foreign direct investments.

Short-term debt based on residual maturity refers to outstanding external debt with an original maturity of one year or less, plus principal payments on medium- and long-term public and private sector loans falling due within the next 12 months.