Philippines’ November GIR Falls to $108.5 Billion

The Philippines’ gross international reserves (GIR) declined to $108.5 billion as of end-November 2024, from $111.1 billion in October, according to preliminary data from the Bangko Sentral ng Pilipinas (BSP).

Despite the decline, the GIR remains a robust external liquidity buffer, equivalent to 7.8 months of imports of goods and services and 4.3 times the country’s short-term external debt based on residual maturity.

The month-on-month reduction was attributed to several factors, including the national government’s net foreign currency withdrawals to settle debt obligations and cover expenditures.

Additional factors contributing to the decrease included net foreign exchange operations by the BSP and a drop in the value of gold holdings due to a decline in global gold prices.

The GIR is a critical indicator of a country’s ability to manage external shocks and meet its foreign obligations.

It consists of foreign investments, gold, foreign exchange, reserves at the International Monetary Fund (IMF), and special drawing rights, and serves as a financial safety net.

Reserves are considered adequate if they cover at least three months of imports and payments for services and primary income, as well as 100% of the country’s short-term foreign liabilities.

The net international reserves (NIR), which represent the difference between the BSP’s reserve assets and liabilities, also fell by $2.6 billion, settling at $108.4 billion by the end of November.

While the reduction in GIR reflects the government’s foreign debt servicing and currency operations, the current reserve level continues to exceed international adequacy standards, ensuring economic stability amid external uncertainties.