The gross international reserves as of end-July dipped to $98 billion from $100.9 billion in the previous month, which the Bangko Sentral said is enough to service 8.3 months worth of imports of goods, payment of services and primary income.
The country's gross international reserves dipped to $98 billion in end July from $100.9 billion the previous month, but the Bangko Sentral ng Pilipinas said this is still more than adequate to cover 8.3 months worth of imports of goods and payments of services and primary income.
The BSP's reserves consists of foreign investments, gold, foreign exchange reserves with the International Monetary Fund, and special drawing rights.
Conventionally, GIR is considered adequate if it could service 3 months worth of imports of goods, payment of services and primary income.
Moreover, it is also about 6.9 times the country’s short-term external debt based on original maturity and 4.5 times based on residual maturity, the BSP press release said.
Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.
The level of GIR, as of a particular period, is considered adequate, if it provides at least 100 percent cover for the payment of the country’s foreign liabilities, public and private, falling due within the immediate twelve-month period.
The month-on-month decrease in the GIR level reflected mainly the National Government’s (NG) foreign currency withdrawals from its deposits with the BSP to settle its foreign currency debt obligations and pay for its various expenditures, and downward adjustment in the value of the BSP’s gold holdings due to the decrease in the price of gold in the international market.
Similarly, the net international reserves (NIR), which refers to the difference between the BSP’s reserve assets (GIR) and reserve liabilities (short-term foreign debt and credit and loans from the International Monetary Fund), decreased by $2 billion to US$98.8 billion as of end-July 2022 from the end-June 2022 level of $100.8 billion.
Tags: #BSP, #GIR, #8.3monthsworthofimports