The country's gross international reserves (GIR) fell to a two-month low of $106.98 billion at the end of May due to debt payment and other government expenses.

According to preliminary data released by the Bangko Sentral ng Pilipinas (BSP) on Friday, the amount was 0.67 percent lower than at end-April, but 14.67 percent more than the $93.29 billion recorded a year ago.

The amount at the end of May was the lowest since the end of March this year when it was $104.48 billion.

"The month-on-month decrease in the GIR level reflected outflows that mainly from the foreign currency withdrawals of the national government from its deposits with the BSP to pay for its foreign currency debt obligations and various expenditures," the central bank explained.

Outflows were largely offset by inflows from the central bank's foreign currency operations and income from overseas investments, as well as an upward adjustment in the value of its gold holdings due to increases in international market prices.

The newest dollar-reserves figure, the Bangko Sentral said, "represents a more than adequate external liquidity buffer."

It's also enough to cover 12.2 months of imports, down from 12.3 months at the end of April but up from 9.1 months a year ago; 7.4 times the country's short-term external debt based on original maturity; and 5.1 times based on residual maturity.

The difference between GIR and total short-term liabilities, known as net international reserves, fell to $106.96 billion at the end of May from $107.69 billion a month earlier.

These reserves are expected to rise to $106 billion this year, the central bank said. This equates to 10.9 months of import cover with current and financial account inflows providing support.

But, central bank Governor Benjamin Diokno, said reserves might reach $120 billion by the end of the year.