The country's gross international reserves or GIR declined to $98.7 billion in September from $99.6 billion in August due to government's higher foreign debt payments and depreciation of gold, based on the preliminary data from the Bangko Sentral ng Pilipinas.

However, BSP said the September level provided the government more than enough external liquidity.

"This is equivalent to 7.3 months' worth of imports of goods and payments of services and primary income. Moreover, it is also about 5.7 times the country's short-term external debt based on original maturity and 3.6 times based on residual maturity," BSP said.

GIR consists of gold, foreign exchange, foreign investments, reserves with the International Monetary Fund, and special drawing rights.

An adequate GIR level is equivalent to at least three-months' worth of the country's imports of goods and payments of services and primary income.

Similarly, the net international reserves or NIR decreased by $0.8 billion to $98.7 billion from $99.5 billion month-on-month.

The NIR is the difference between the BSP's reserve assets or GIR and reserve liabilities, which consists of short-term foreign debt, and credit and loans from the IMF.

Peso depreciation

Michael Ricafort, chief economist of Rizal Commercial Banking Corporation, said the lower GIR level was partly influenced by peso depreciation.

"Philippine GIR in September was down for the 4th month in five months. The net increase in the GIR for most months since September 2022 somewhat correlated with the relatively stronger peso as the US dollar/peso exchange rate reached a new record high of P59.00 in the latter part of September 2022," he said.

Ricafort added that foreign investments to the Philippines decreased as the US and the rest of the world were facing market volatilities.

"There was a decline in the US stock markets and government bonds during the month, partly triggered by the downgrade in the US credit ratings by Fitch last August," he said.

Not worrisome at all

However, Ricafort said the Philippine GIR level in September was still generally positive as the Philippines continues to benefit from strong dollar-earning industries.

"It's not worrisome at all. The latest GIR still posted net increase over the past year, after the continued increase of the country's structural US dollar/foreign currency inflows such as remittances from overseas Filipino workers and revenues from business process outsourcing firms," he explained.

The economist said the tourism sector could further boost the Philippine GIR if the country's foreign debt payments remain minimal.

"There has been a notable continued recovery in foreign tourism revenues that were almost not present two to three years ago. But this could have been offset by some foreign debt payments," Ricafort said.

"The Philippines' external debt-to-GDP ratio at 28.5 percent as of the second quarter, the highest in at least a decade. But this was somewhat offset by the faster growth in GDP that led to a bigger GDP base/denominator," he explained further.