Gross international reserves hit 3-month high

The country’s gross international reserves (GIR) edged up to their highest level in three months in June as geopolitical pressures began to ease.

Latest data from the Bangko Sentral ng Pilipinas (BSP) showed that the Philippines’ dollar reserves had risen to $104.8 billion as of end-June. This marked the highest level since hitting $106.6 billion in March. This was also the first increase after two straight months of declines, when heightened market volatility triggered by the Middle East war weighed on reserve holdings.

However, the current level remains below the central bank’s year-end projection of $111 billion and is also lower than the $106 billion recorded in June 2025.

The BSP said the increase in June was driven mainly by its net income from investments abroad, as well as the national government’s net foreign currency deposits with the central bank.

These gains were partly offset by downward valuation adjustments on the BSP’s gold holdings and foreign exchange operations, as well as payments for foreign debt obligations.

The reserves serve as the country’s main buffer against external shocks, helping finance imports and foreign debt payments.

The reserve stockpile consists largely of A-rated foreign investments held by the central bank, alongside gold and foreign exchange holdings. It also includes the country’s reserve position in and borrowing arrangements with the International Monetary Fund.

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Jonathan Ravelas, senior adviser at Reyes Tacandong & Co., said the rebound was likely driven by improving external conditions, supported by stronger foreign exchange inflows and a more stable market environment.

“While I wouldn’t say volatility has completely disappeared, the recovery in reserves indicates that pressures seen in previous months have eased and investor sentiment has become more constructive,” Ravelas said.

The GIR level can cover 6.8 months’ worth of imports of goods and payments of services. It was nearly four times the country’s short-term external debt based on residual maturity.