THE Philippines’s gross international reserves (GIR) slipped as of end-March, dragged by weak foreign investment flows as a result of the United States levying higher import tariffs and reciprocal tariffs.
Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed the country’s GIR decreased to $106.228 billion as of end-March 2025 from $107.395 billion in end-February 2025.
The BSP traced the decline to the national government drawdowns on its foreign currency holdings with the BSP to settle external obligations, along with net foreign exchange operations by the central bank.
Rizal Commercial Banking Corporation Chief Economist Michael L. Ricafort pinned the lowered GIR on the monthly decline in foreign investments amid Donald Trump’s higher import tariffs and anticipation of reciprocal tariffs.
“[The] Trump factor/premium led to some market volatility, especially on the US stock markets and other risky asset classes, though offset by some shift to safe havens such as US Treasuries/government bonds that led to lower bond yields recently,” Ricafort said.
Reserves in the form of foreign investments dropped month-on-month to $88.562 billion from $90.116 billion.
The central bank may have also “intervened” in the forex market to “smooth out volatility” or “temper excessive peso depreciation” in March, which naturally reduces reserves, according to John Paolo R. Rivera, senior research fellow at the Philippine Institute for Development Studies.
Foreign currency deposits also dipped to $498.2 million as of end-March from the previous month’s $805.7 million.
Still, the BSP said the latest GIR level “provides a robust external liquidity buffer,” which is equivalent to 7.3 months’ worth of imports of goods and payments of services and primary income.
The GIR is seen to be adequate if it can finance at least three months’ worth of the country’s imports of goods and payments of services and primary income, the BSP explained.
“The dip [in the GIR level] is not alarming but rather part of routine fluctuations tied to market and debt management operations,” Rivera added.
The country’s gold reserves, which amounted to $12.762 billion in March 2025, up from $12.049 billion in February 2025.
Special drawing rights held by the Philippines were maintained at $3.752 billion in March 2025 from the same level in the previous month.
The current GIR level covers about 3.7 times the country’s short-term external debt based on residual maturity.
Short-term debt based on residual maturity refers to outstanding external debt with an original maturity of one year or less, including principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.
Likewise, the net international reserves (NIR) went down by $1.2 billion to $106.2 billion in end-March from $107.4 billion in end-February.
Ricafort said the GIR could still be supported by the continued growth in inflows of remittances from overseas Filipinos, business process outsourcing revenues, recovery in tourism revenues and foreign direct investments.
