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THE PHILIPPINES’ gross international reserves (GIR) slightly increased in August as the valuation of the central bank’s gold assets reached an unprecedented peak.
Initial figures from the Bangko Sentral ng Pilipinas (BSP) indicated that dollar reserves rose by 0.46% to $105.9 billion by the end of August, compared to $105.4 billion at the end of July.
On a year-over-year basis, dollar reserves declined by 1.8% from $107.857 billion in August 2024.
“The Philippines’ gross international reserves expanded in August 2025 due to increasing global gold prices and earnings from Bangko Sentral ng Pilipinas’ investments,” the central bank stated in a release.
Sufficient foreign exchange reserves shield the nation from market fluctuations and guarantee that it can meet its financial obligations during an economic downturn.
Data from the BSP revealed that the level of dollar reserves as of the end of August is adequate to cover approximately 3.4 times the nation’s short-term external debt based on residual maturity.
This is also equivalent to 7.2 months’ worth of goods imports and payments for services and primary income, exceeding the three-month benchmark by more than double.
“The current GIR level provides a strong external liquidity buffer,” the central bank added.
International reserves consist of the central bank’s foreign assets primarily held as investments in foreign-issued securities, foreign currency, and monetary gold, among other forms.
These are further complemented by claims to the International Monetary Fund (IMF) in the shape of reserve position in the fund and special drawing rights (SDRs).
Data showed that the BSP’s foreign investments were at $85.852 billion as of the end of August, down 0.4% from $86.187 billion at the close of July. Compared year-over-year, it decreased by 7%.
The value of the central bank’s gold holdings surged by 5.4% to a record $14.523 billion at the end of August from $13.783 billion at the end of July, an increase of 42.1% from $10.221 billion as of August last year. Gold typically performs well amidst economic uncertainty.
Foreign exchange holdings advanced by 8.3% to $897.8 million as of August from $828.9 million the prior month. Annually, it rose by 13.7%.
The nation’s reserve position in the IMF also increased by 1% to $736.4 million as of the end of August from $729 million the previous month, marking a year-over-year rise of 1.4%.
SDRs — or the amount the Philippines can access from the IMF’s reserve currency pool — rose by 0.2% month on month to $3.895 billion as of August from $3.889 billion. Annually, it increased by 1.3% from $3.847 billion.
Meanwhile, net international reserves escalated by 0.46% to $105.9 billion from $105.4 billion as of the end of July. These represent the difference between the BSP’s reserve assets and reserve liabilities, accounting for short-term foreign debts and loans from the IMF.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort noted that the month-on-month growth in gold holdings stemmed from rising gold prices in the global marketplace.
“(This was) primarily due to the latest month-on-month rise in gold holdings by $740 million or 5.4% to a new record high of $14.5 billion as global gold prices increased by 4.8% month on month in August 2025 to unprecedented heights of $3,600 per ounce on Sept. 5, 2025,” he mentioned.
However, Mr. Ricafort pointed out that this was balanced out by the $335-million month-on-month decrease in foreign investments due to market instability and the elevated US tariffs implemented on Aug. 7.
“In the upcoming months, the country’s GIR could still gain support from the sustained growth in structural inflows from OFW (overseas Filipino worker) remittances, BPO (business process outsourcing) earnings, and exports (though countered by imports),” he noted.
Mr. Ricafort indicated that the government’s strategy to minimize foreign borrowings may also influence the GIR level in forthcoming months.
“Still relatively high GIR at $105.9 billion… among three-year peaks [and] could further enhance the nation’s external position,” he stated.
The BSP predicts dollar reserves will reach $104 billion this year and $105 billion in 2026. — K.K.Chan
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