THE country’s foreign reserves, its buffer against external shocks, rose to $104.8 billion as of end-August 2026, the highest level in five months or since March 2026, data from the Bangko Sentral ng Pilipinas (BSP) showed.
Preliminary data from the central bank showed that the latest gross international reserves (GIR) figure is 1.43 percent higher than the $103.32 billion recorded in end-July 2026.
Year-on-year, however, foreign reserves declined by 2.15 percent from the $107.098 billion as of end-August 2025.
According to the central bank, the increase in reserves was mainly driven by the upward valuation adjustments in the BSP’s gold holdings due to the increase in the price of gold in the international market.
The BSP’s net income from its investments abroad also contributed to the increase in reserves.
These were partly offset, however, by the national government’s (NG) drawdowns on its foreign currency deposits with the central bank for external debt service.
Explaining the central bank’s net income from its investments abroad, Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines (UBP) said: ‘Part of the BSP’s reserves is invested in safe foreign assets that generate interest and investment income, which can help support reserve growth over time.’
On a month-on-month basis, data from the BSP showed gold holdings climbed by 9.26 percent to $19.11 billion as of end-August 2026 compared to the $17.49 billion as of end-July 2026.
Gold holdings also inched up compared to the same period a year ago, by 31.61 percent from $14.52 billion as of end-August 2025.
In contrast, securities, which BSP said refer to highly liquid and marketable debt securities, declined by 4.68 percent to $64.02 billion as of end-August 2026 compared to the $67.16 billion as of end-July 2026.
Securities exclude investments under the Asian Bond Fund (ABF) and Bank of International Settlements Investment Pool (BISIP).
In the same vein, BSP data showed currency and deposits plunged to $1.55 billion as of end-August 2026, or 17.55 percent lower than the $1.88 billion recorded as of end-July 2026.
Currency and deposits include time deposits, demand deposits, and cash holdings.
According to the central bank, the $104.8-billion level of foreign reserves as of end-August 2026 ‘provide sufficient foreign currency to meet the country’s import needs, service its external debt obligations, and serve as a buffer against external economic shocks.’
Jonathan L. Ravelas, senior adviser at Reyes Tacandong and Co., said the headline annual decline ‘may grab attention,’ but he pointed out: ‘The bigger story is that the Philippines continues to maintain a strong external liquidity buffer.’
‘The GIR remains a key source of resilience amid ongoing global economic and geopolitical uncertainties,’ added Ravelas.
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corporation (RCBC), pointed out that for the coming months: ‘GIR would be a function of world gold prices for valuation of gold holdings, structural inflows of US dollars into the country such as OFW remittances, BPO revenues, foreign tourism receipts and foreign investments.’
However, Ricafort explained further that these are offset by the country’s trade deficit, payment of foreign debt/obligations, investments abroad, and any intervention or smoothening of volatility in the local currency market.