The Philippines’ gross international reserves (GIR) inched up to $105.5 billion in May, reflecting adequate foreign exchange liquidity, but may still manifest moderate fluctuations in the months ahead due to various factors, an analyst said.
The Bangko Sentral ng Pilipinas (BSP) said the GIR in May posted a modest 0.18 percent increase from the final April figure. This level remains comfortably above international benchmarks, covering more than seven months’ worth of imports, the BSP said.
The Philippine Institute for Development Studies (PIDS) pointed out that the slight uptick signals resilience in the country’s external buffers.
“While the GIR remains robust and serves as a critical buffer against external shocks, it continues to depend on sustained inflows from overseas Filipino worker (OFW) remittances, BPO revenues and a manageable current account deficit,” John Paolo Rivera, senior research fellow at PIDS, said.
Modest swings likely
Despite the healthy level of reserves, Rivera cautioned that the GIR could experience moderate volatility in the coming months, shaped by global market dynamics, the peso’s performance, and the timing of external debt payments and BSP foreign exchange operations.
“Recent peso strength could temper reserve accumulation through limited forex interventions but may also reflect improved market sentiment,” he said.
He added that while the recent downgrade in the US credit rating could prompt portfolio rebalancing globally, the depth and liquidity of the US Treasury market and the BSP’s conservative management approach mitigate any significant exposure risks.
Year-on-year, the GIR in May rose by 0.4 percent compared with the same month level in 2024.
Valuation gains
The BSP attributed the month-on-month increase mainly to upward valuation adjustments in its gold holdings due to rising international gold prices.
Additional support came from higher net income from the BSP’s offshore investments and net foreign currency deposits by the national government.
RCBC chief economist Michael Ricafort said key drivers supporting GIR in the coming months include structural sources of dollar inflows–such as OFW remittances, BPO revenues, exports, foreign tourism receipts, as well as direct and portfolio investments.
Ricafort noted that the current GIR level is relatively higher than in recent years and provides fundamental support to the peso, particularly “against any speculative attacks.”
Favorable credit ratings
Ricafort added that the elevated GIR strengthens the country’s external position and helps maintain favorable credit ratings.
He cited recent affirmations by international credit agencies, including the Philippines’ first-ever A credit ratings from Japan Credit Rating Agency and Japan’s Rating and Investment Information (R&I), along with stable ratings from Moody’s, Fitch, and S&P.
These, he said, reflect “resilience and improved international investor confidence in the Philippines.”
Improvements in fiscal performance over the past years also position the country to attract more international capital at lower costs and better terms, further boosting GIR, Ricafort added.
GIR composition
As of May, the GIR was composed of $86.42 billion in foreign investments, accounting for 81.9 percent of the total, and $13.72 billion in gold holdings, or 13.0 percent. The country’s reserve position with the International Monetary Fund (IMF) stood at $715.8 million, while its special drawing rights (SDRs) remained stable at $3.9 billion.
Foreign investments fell 3.5 percent year-on-year from $89.52 billion in May 2024 and were down 0.29 percent from April 2025.
The BSP considers the GIR adequate if it can cover at least three months’ worth of imports and payments for services and primary income.
Currently, the GIR is sufficient to cover 3.7 times the country’s short-term external debt based on residual maturity.
