Dollar reserves slip to 18-month low

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MANILA, Philippines — The country’s dollar reserves fell to their lowest level in 18 months as the Bangko Sentral ng Pilipinas (BSP)’s foreign exchange operations and government withdrawals outweighed gains from higher gold valuations.

Preliminary data from the BSP showed that the country’s gross international reserves (GIR) declined by 1.3 percent to $103.38 billion as of end-July from $104.74 billion in June. The latest level was also down by 1.9 percent from $105.42 billion in July last year.

This brought the reserves to their lowest level since January 2025, when GIR stood at $103.27 billion.

GIR consists of foreign assets held by the central bank, including securities, foreign currency and deposits, gold, special drawing rights and other reserve assets. 

The stockpile serves as the economy’s first line of defense against external shocks by providing foreign currency for imports and external debt payments.

The BSP attributed the July decline mainly to its net foreign exchange operations, the national government’s drawdowns on its foreign currency deposits for external debt payments and the government’s net foreign currency withdrawals from deposits with the central bank.

BSP data showed foreign securities, which remained the largest component of the country’s reserves, declined by 6.6 percent month-on-month to $67.26 billion in July. Currency and deposits likewise fell by 9.2 percent to $1.85 billion.

These outflows were partly cushioned by upward valuation adjustments on the BSP’s gold holdings as international gold prices increased, as well as income earned by the central bank from its investments abroad.

Gold holdings increased by 1.7 percent to $17.49 billion in July from $17.19 billion in June as higher global prices lifted the value of the central bank’s bullion reserves. Compared with July last year, the value of gold holdings jumped by almost 27 percent from $13.78 billion

Despite the decline, the BSP said reserves remained adequate. The end-July GIR level was equivalent to 6.7 months’ worth of imports of goods and payments of services and primary income. It was also equivalent to about 3.6 times the country’s short-term external debt based on residual maturity.

Jonathan Ravelas, senior adviser at Reyes Tacandong & Co., said the reserves remain sufficient to cushion the economy against external shocks, although their recent decline should be closely monitored.