THE country’s dollar buffers slipped as of end-April as the national government paid some of its foreign debt obligations and with the lower valuation of the central bank’s gold reserves.

Preliminary data released by the Bangko Sentral ng Pilipinas (BSP) on Friday evening showed the gross international reserves (GIR) as of end-April stood at $106.756 billion, down by 0.51% from the $107.308 billion in the prior month. The country’s foreign exchange buffers also slipped 0.8% from the $107.705 billion seen a year earlier.

“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 as the NG settled its foreign currency debt obligations and paid for various expenditures as well as the downward adjustment in the value of the BSP’s gold holdings due to the decrease in the price of gold in the international market,” the BSP said in a statement.

The dollar reserves seen last month were enough to cover seven times the country’s short-term external debt based on original maturity and 5.5 times based on residual maturity.

It is also equivalent to 9.4 months’ worth of imports of goods and payments of services and primary income.

Ample foreign exchange buffers protect an economy from market volatility and serves as a guarantee for the country’s ability to pay its debts in the event of an economic downturn.

Broken down, the BSP’s foreign investments stood at $90.706 billion as of end-April, slipping by 0.8% from the $91.457 billion a month earlier and by 0.53% from the $91.188 billion a year earlier.

Buffers in the form of gold were valued at $9.277 billion, or lower by 1.3% than the $9.402 billion as of end-March and by 0.35% from the $9.31 billion a year earlier.

The country’s reserve position in the International Monetary Fund (IMF) also dipped 3.11% to $765.4 million from $790 million in the prior month and by 4.8% from the $803.8 million as of end-April 2021.

Meanwhile, foreign currency deposits increased 19.7% to $2.116 billion from $1.768 billion in March, although it declined by 60% from the $5.173 billion a year earlier.

Special drawing rights — or the amount the country can tap from the IMF — was kept at $3.89 billion for the second straight month. It was more than three times the $1.229 billion seen as of April 2021.

In the coming months, GIR will be boosted by continued inflows of remittances and foreign direct investments as the global economy recovers from the pandemic, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Tourism receipts as the country reopens its doors to foreign tourists will also boost the country’s dollar buffers, he added.

The BSP projects the GIR to reach $108 billion by the end of 2022. — Luz Wendy T. Noble

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