The country’s gross international reserves (GIR) shrank to $103.4 billion as of end-April from $104.1 billion as of end-March, the Bangko Sentral ng Pilipinas (BSP) said.

The central bank attributed the decline to higher payments to foreign debt by the national government and its broad expenditure program.

GIR consists of gold, foreign investments, foreign exchange, special drawing rights, and the country’s reserve position in the International Monetary Fund (IMF).

Despite the smaller GIR, the BSP said it remains more than enough to fulfill the country’s external obligations as it represents payments for imports of goods and services and primary income over 7.7 months.

GIR components reduced

With nearly all GIR components reduced but higher foreign debt liabilities, net international reserves decreased by $0.6 billion to $103.4 billion from $104 billion.

IMF first deputy managing director Gita Gopinath said inflows of foreign investments to some countries might still slow down as geopolitical tensions between the United States and China continue.

“As for foreign direct investment, fragmentation in a world divided into two blocs centered around the US and China with some countries remaining non-aligned could result in long-term losses of around two percent of global GDP,” she said in her speech on Tuesday at Stanford University.

Based on recent IMF data, Gopinath shared that only Vietnam and Mexico have drawn substantial investments as alternative manufacturing areas of the US and China.

Gopinath added payments for imports, especially food, might increase among developing countries.