THE country’s gross international reserves (GIR) fell to its lowest level in three months in February with the Bangko Sentral ng Pilipinas (BSP) attributing the drop to its foreign exchange operations, the government’s foreign debt payments and gold prices.
Central bank data released on Wednesday showed the Philippines’ foreign exchange reserves at $80.618 billion, down 1.16 percent from January and also lower compared to the $81.436 billion recorded a year earlier.
February’s reserve level was the lowest since November 2017’s $80.309 billion.
The month-on-month decline was due “mainly to outflows arising from the foreign exchange operations of the BSP, payments made by the national government for its maturing foreign exchange obligations as well as revaluation adjustments on the BSP’s gold holdings resulting from the decrease in the price of gold in the international market,” the central bank said in a statement.
These were partially tempered by the government’s net foreign currency deposits, which included proceeds from the new money component of the ROP Global Bonds issuance under the government’s liability management transactions, and income from BSP foreign exchange operations.
The government made a successful return to the international capital markets in January via 10-year global bond issue. Of the $2-billion offering, $1.25 billion was allocated to participants of a switch exercise for 14 of the country’s outstanding dollar-denominated bonds maturing between 2019 and 2037.
The central bank said the latest reserve level was enough to cover 8.2 months worth of imports — the same import cover in January but lower than the 8.7 months recorded year earlier — and was also equivalent to 5.9 times the country’s short-term external obligations due within one year and 4.2 times based on residual maturity.
Net international reserves (NIR), which refer to the difference between the BSP’s GIR and total short-term liabilities, decreased to $80.6 billion compared to the end-January level of $81.2 billion.