Manila: The Bangko Sentral ng Pilipinas (BSP) reported that the country’s Gross International Reserves (GIR) stood at $105.2 billion in May 2025. This is a slight drop from $105.3 billion in April.
Despite the small decline, the central bank said the reserves remain strong and “healthy.” The BSP explained that the GIR provides a solid external liquidity buffer. It can cover 7.1 months of imports and payments for services and primary income.
The central bank also said the reserves are enough to cover about 3.3 times the country’s short-term external debt, based on residual maturity.
In comparison, the May GIR was slightly higher than the $103.0 billion recorded in January 2025, which was the lowest since April 2024. At that time, the BSP said the decrease was due to the sale of foreign exchange and the use of deposits to pay foreign debt.
Gross International Reserves are foreign assets held by the central bank. They help maintain economic and financial stability, especially during external shocks or currency swings. The reserves include:
Foreign exchange reserves: Holdings in currencies such as USD, EUR, or JPY, usually in treasury bills, deposits, or bonds.
Gold reserves: Physical gold held as a store of value.
Special Drawing Rights (SDRs): Reserve assets allocated by the International Monetary Fund (IMF), convertible to usable currencies.
IMF reserve position: The country’s quota-based drawing rights from the IMF.
Other reserve assets: Financial instruments or derivatives that can be converted to foreign exchange.
A high GIR level shows strong economic fundamentals. It helps stabilize the peso, builds investor confidence by reducing default risk, supports the country’s ability to pay external debts, and covers import costs. The Philippines’ 7.1 months of import cover is more than twice the IMF’s safe threshold of three months.
However, the Balance of Payments (BOP) for May 2025 recorded a deficit of $298 million. This was mainly due to the national government paying foreign debts by drawing down dollar deposits held with the BSP.
From January to May 2025, the BOP showed a deficit of $5.8 billion, reversing the $1.6 billion surplus during the same period last year. The BSP said this was mainly caused by a sustained trade deficit in goods, which the Philippine Statistics Authority (PSA) estimated at $15.91 billion for January to April.
Still, the impact of the trade gap was cushioned by strong remittance inflows from overseas Filipinos, government foreign borrowings, and foreign portfolio investments.
Despite ongoing external pressures, the BSP assured that the Philippines’ gross international reserves remain a strong buffer. They continue to support the peso and overall financial stability.
