Manila: The country's foreign reserves remain adequate despite the decline in July, the Bangko Sentral ng Pilipinas (BSP) said. Preliminary data released Friday showed the gross international reserves (GIR) settled at USD103.4 billion in July, lower than the USD104.8 billion recorded in June this year.

According to Philippines News Agency, the BSP attributed the decline to its net foreign exchange operations, the national government's drawdowns on its foreign currency deposits with the BSP for external debt service, and the national government's net foreign currency withdrawals from its deposits with the BSP. These factors were partly offset by the upward valuation adjustments in the BSP's gold holdings due to an increase in the price of gold in the international market, along with the BSP's net income from its investments abroad.

GIR consists of foreign-denominated securities, foreign exchange and other assets, including gold. These reserves help finance imports and foreign debt, stabilize the currency, and cushion the economy against external shocks. Despite the decline, the BSP emphasized that the GIR provides sufficient foreign currency to meet the country's import needs, service its external debt obligations, and serve as a buffer against external economic shocks.

The end-July GIR level can cover up to 6.7 months' worth of imports of goods and payments of services and primary income. The BSP also stated that it can cover about 3.6 times the country's short-term external debt based on residual maturity.