16 April 2021
END-MARCH 2021 GIR SETTLES AT US$104.82 BILLION
The country’s gross international reserves (GIR) level, based on preliminary data, settled at US$104.82 billion as of end-March 2021 from the end-February 2021 GIR level of US$105.16 billion. The latest GIR level represents a more than adequate external liquidity buffer, which can help cushion the domestic economy against external shocks. This buffer is equivalent to 12 months’ worth of imports of goods and payments of services and primary income.[1] Moreover, it is also about 7.5 times the country’s short-term external debt based on original maturity and 5.3 times based on residual maturity.[2], [3]
The month-on-month decrease in the GIR level reflected outflows mainly from the net withdrawal in the National Government’s foreign currency deposits with the BSP, which were largely used for debt servicing, and a downward adjustment in the value of BSP’s gold holdings due to the decrease in the price of gold in the international market. These outflows were partly offset, however, by the BSP’s income from its investments abroad.
Similarly, the net international reserves (NIR), which refers to the difference between the BSP’s GIR and total short-term liabilities, decreased by US$0.34 billion to US$104.81 billion as of end-March 2021 from the end-February 2021 level of US$105.15 billion.
[1] By convention, GIR is viewed to be adequate if it can finance at least three-months’ worth of the country’s imports of goods and payments of services and primary income.
[2] 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.
[3] 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.
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Source:
Bangko Sentral ng Pilipinas
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