The Philippines is expected to see its gross international reserves (GIR) rise to $99.7 billion at the end of July, according to preliminary data from the Bangko Sentral ng Pilipinas (BSP). The increase in the value of the BSP’s gold holdings, due to rising prices, has contributed to this growth. In June, the GIR stood at $99.4 billion.
While the BSP’s overseas investments decreased slightly in July, the GIR level is still considered to be more than adequate, providing a sufficient external liquidity buffer equivalent to 7.4 months’ worth of imports of goods and payments of services and primary income. The GIR is also more than twice the minimum adequate amount needed to finance the country’s import bill.
Analysts believe that the increase in GIR could help strengthen the Philippines’ external position and maintain its favorable credit ratings, despite the challenges posed by the COVID-19 pandemic. Finance Secretary Benjamin Diokno has previously expressed the government’s goal of achieving an “A”-level credit rating from at least one of the major global rating agencies by 2028.
