Philippines’ dollar reserves inched up to $105.5B in May
PNA file photo
MANILA, Philippines — The Philippines accumulated more dollar reserves in May, increasing the country’s buffer against shocks at a time when US President Donald Trump’s unpredictable trade policies are roiling markets.
Latest data from the Bangko Sentral ng Pilipinas (BSP) showed the gross international reserves (GIR) slightly rose to $105.5 billion in May, from $105.3 billion in the preceding month.
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The GIR serves as the country’s buffer against external shocks. The reserve assets consist of foreign investments of the central bank, gold and foreign exchange as well as borrowing authority with the International Monetary Fund (IMF) and the country’s contributions to the same Washington-based institution.
Dollar reserves exceed forecast
At this point, the GIR is running above the forecast of the BSP, which expects the buffer funds to end the year at $105 billion.
John Paolo Rivera, a senior research fellow at state-run think tank Philippine Institute for Development Studies, said the uptick in reserves last month showed the resilience of one of the country’s defenses against external headwinds.
“In the coming months, we may see GIR fluctuate modestly depending on global market conditions, the Philippine peso’s performance, and the timing of external debt payments and foreign exchange operations,” Rivera said.
Broken down, foreign investments of the BSP, which accounted for the bulk of the GIR, was relatively flattish at $86.4 billion.
Gold holdings
Meanwhile, the value of gold held by the central bank went up by 3 percent to $13.7 billion. Trump’s sweeping tariffs on the rest of the world have been pushing up demand for the precious metal, which is considered a safe-haven asset.
READ: Gold bull run tempers GIR decline
The country’s stash of foreign exchange also jumped by 5 percent to $704.2 billion. The peso’s appreciation against the dollar has reduced the need for the BSP to intervene in the foreign exchange market, while the recent offshore debt offerings of the Marcos government added more dollars to the pile.
Overall, the central bank said the $105.5 billion GIR in May can pay for 7.3 months’ worth of goods imports. That is way above the global standard of three-month import cover.
