Lofty gold prices buoy BSP dollar reserves

The Philippines began 2026 with foreign exchange reserves at a 16-month high, buoyed by a record valuation of the central bank’s gold holdings and inflows from the Marcos administration’s recent offshore bond sale.

Latest data from the Bangko Sentral ng Pilipinas (BSP) showed the country’s gross international reserves (GIR) had reached $112.5 billion in January, up 9 percent from a year earlier and the highest level since September 2024.

GIR serves as the country’s buffer against external shocks. It also helps an economy finance its imports and foreign debt obligations in extreme conditions when there are no export earnings or foreign loans.

The reserve assets consist of A-rated foreign investments of the central bank, gold and foreign exchange, as well as borrowing authority with the International Monetary Fund and the country’s contributions to the same Washington-based institution.

The buffer funds as of January already topped the BSP’s estimate of $110 billion for 2026. Gold provided the biggest lift.

The value of the central bank’s bullion holdings jumped nearly 76 percent from a year earlier to $20.7 billion, the highest level on record since 1971, as global prices of the precious metal continued to climb to unprecedented highs amid economic and geopolitical unease abroad.

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At this point, gold now accounts for over 18 percent of total reserves, up from 11 percent a year ago. BSP Governor Eli Remolona Jr. previously said the central bank would continue to maintain a well-diversified GIR and would only sell gold “when it becomes too big a part of our portfolio.”

At the same time, the BSP’s foreign-exchange holdings jumped by 61 percent to $1.2 billion. This was after the government made its first trip to the international debt market for this year with a triple-tranche dollar bond sale last month.