Philippine foreign currency holdings retreated to their weakest point since early 2025, settling at $104.0 billion at the close of May, as the government drew down its dollar deposits to pay external obligations and global gold prices weakened.
The figure, reported by the Bangko Sentral ng Pilipinas (BSP) as $103.974 billion in preliminary data, marked the lowest reserve level since January 2025, when holdings stood at $103.271 billion. BusinessWorld reported the May total fell 0.34 percent from the $104.328 billion logged a month earlier, and slipped 1.14 percent against the $105.177 billion recorded a year ago.
A reserve stockpile of this size is treated as a measure of how well an economy can absorb shocks from abroad. The central bank said the level remained adequate, providing what it described as a “robust external liquidity buffer, equivalent to 6.9 months’ worth of imports of goods and payments of services and primary income,” well beyond the three-month minimum used internationally. The BSP added that the holdings could cover roughly 3.6 times the country’s short-term external debt measured by residual maturity.
Three factors pushed the total lower over the month, according to the central bank: the national government’s withdrawals from its foreign currency deposits to settle maturing external debt, reduced valuations on the BSP’s gold reserves as bullion prices fell globally, and the bank’s own foreign exchange operations. BusinessWorld linked part of that intervention to efforts to steady the peso during the Middle East conflict.
The composition of the reserves shifted alongside the headline drop. The central bank’s foreign investments edged down 0.19 percent to $79.247 billion from the prior month and were nearly 8 percent lower than a year earlier. Gold holdings declined 1.51 percent month on month to $19.48 billion, though they remained sharply higher than the $13.725 billion held in May 2025, a gain of close to 42 percent. Foreign currency and deposits, by contrast, rose 24.31 percent to $583 million.
The Philippines also holds claims on the International Monetary Fund as part of its reserve mix. Its reserve position in the fund stood at $712.2 million at the end of May, down 1.58 percent from April, while its special drawing rights — the share it may draw from the IMF’s currency basket — eased to $3.952 billion.
Reserves had climbed to a peak of $113.3 billion in February before tapering across the following months. The central bank expects the stockpile to recover by year-end, projecting a close of $111 billion for 2026, which would surpass the $110.8 billion booked at the end of 2025.
