The country’s gross international reserves (GIR) level declined further to $103 billion as of January from $106.3 billion last year as the government continued to pay higher debt, preliminary data from the Bangko Sentral ng Pilipinas revealed.

The new GIR level fell from a peak of $112.7 billion as of September 2024.

However, the BSP said the January level remained more than adequate to cover 7.3 months’ worth of imports of goods and payments of services and primary income. The BSP added it also represented 3.6 times the country’s short-term external debt based on residual maturity.

The BSP attributed the lower GIR to its foreign exchange operations and the national government’s continued withdrawal of foreign currency to pay off its external debt.

Foreign exchange operations resulted in $733.5 million billion reserves, down from $1.4 billion.

Meanwhile, the Bureau of the Treasury (BTr) reported the national government already grew its external debt by 11.4 percent last year to P5.12 trillion compared to the year 2023.

The BTr said the peso depreciation against the US dollar contributed P201.55 billion to the Philippines’ foreign debt.

The country’s total GIR also consists of its reserve position and special drawing rights with the International Monetary Fund, foreign investments, and gold holdings.

Jonathan Ravelas, financial market analyst and senior adviser at Reyes Tacandong & Co., said the Marcos administration will continue to borrow to drive economic growth, especially through infrastructure projects for tourism.

“If you moderate your eating and you don’t eat carbs, you become lethargic. It’s okay to eat a lot of carbs because we’re a growing economy,” he said.

While peso depreciation entails certain disadvantages, Ravelas said its temporary occurrence could help spark tourists’ interest in the Philippines.

Accordingly, the country’s debt-to-GDP ratio already slightly expanded to 60.7 percent last year from the government’s outlook of 60.7 percent after economic growth slowed at 5.6 percent, below its target of at least 6 percent.

However, Ravelas said government officials should be able to navigate financial challenges, drawing lessons from the Asian Financial Crisis, previous geopolitical tensions and Trump presidency in the United States, which global leaders describe as erratic and protectionist.