The country’s gross international reserves (GIR) increased to $106.7 billion as of end-February from $103.3 billion in January this year, after the government entered the Euro-denominated sustainability bonds market.

The Bangko Sentral ng Pilipinas (BSP) said the new GIR level remains more than adequate, representing 7.5 months’ worth of imports of goods and payments of services and primary income.

BSP attributed the higher GIR level to the delivery of the government’s proceeds from its issuance of fixed-rate global bonds last January 23.

The bonds brought the government a total of $3.29 billion, consisting of 10-year and 25-year US bonds worth $2.25 billion and 7-year Euro bonds worth $1 billion.

The Euro bonds sale aimed to fund the government’s green and sustainability projects, and marked the first time the government issued a Euro-denominated sustainability bond.

Another factor that increased the GIR included the higher value of the country’s gold reserves held and managed by the BSP.

According to APMEX, a gold dealer, global prices of the precious metal rose by 11 percent in the past two months, with a peak at $2,956.50 per ounce on 25 February from $2,814.50 per ounce on 31 January.

Last, the BSP said it grew its net income from foreign investments.

The BSP said the country’s total foreign investments rose to $89.4 billion from $86.4 billion.

Accordingly, the net international reserves (NIR) grew to $106.6 billion from $103.2 billion.

Reserve assets higher

This growth reflected the increase in BSP’s reserve assets over its reserve liabilities which include short-term foreign debt and credit and loans from the International Monetary Fund.

The February GIR was still lower than the $112 billion recorded in September last year.

Jonathan Ravelas, senior adviser at Reyes Tacandong & Co., said investors might take more calculated moves amid the global economic uncertainties stemming from US President Donald Trump’s policies.

“Geopolitical tensions and climate change are upside risks to inflationary pressures, and sometimes markets tend to reverse and risk off,” he said.

In its outlook report, Sun Life Investment Management and Trust Corporation (SLIMTC) said the Philippines might continue to attract investments, with a projected economic growth of 6.2 percent this year and relatively low inflation of 3.1 percent.

Due to unpredictable Trump policies, SLIMTC said the peso might weaken around P58 to P61 per US dollar, which could make loan payments for foreign debt by the government more expensive.

However, due to prudent financial management, Rizal Commercial Banking Corp. chief economist Michael Ricafort said S&P Global has upgraded the Philippines’ credit outlook from stable to positive for this year and the next.

This means relatively more affordable interest rates to the government and reflects its strong capacity to repay loans.