Current GIR level enough but ‘hardly reassuring’
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ESPITE the “adequacy” of the Philippines’s gross international reserves (GIR), the current level is “hardly reassuring” due to global uncertainties and ongoing fiscal consolidation challenges, according to an economist. Latest data from the Bangko Sentral ng Pilipinas (BSP) showed the country’s GIR increased to $106.650 billion in February 2025 from $103.271 billion in January 2025. This is a reversal from the 3.04-percent contraction in January 2025 from the $106.3 billion posted at the end of December 2024. “The latest GIR level represents
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a more than adequate external liquidity buffer equivalent to 7.5 months’ worth of imports of goods and payments of services and primary income,” the BSP said. The GIR is seen to be adequate if it can finance at least threemonths’ worth of the country’s imports of goods and payments of services and primary income. However, Ateneo de Manila University economist Leonardo A. Lanzona pointed out that the GIR level in February simply restores the situation at the start of the year. “In the light of current uncertainties, including the continued challenges in fiscal consolidation, the observed increase in GIR is
hardly reassuring,” Lanzona told BusinessMirror. With high debt repayments scheduled in the 2025 budget and priority projects such as in education and social security remaining unappropriated, the government, Lanzona said, may tap the reserves to secure funding. “[The] government needs to look for funds to satisfy these needs. If it is not able to do so, they would likely reduce the GIR,” he said. The country’s external position should instead be boosted by reforms that increase economic activity, especially in trade and domestic production, and not just by prudent fiscal management, Lanzona added.
Moreover, the current GIR level is also about 3.8 times the country’s short-term external debt based on residual maturity. Short-term debt based on residual maturity refers to outstanding external debt with an original maturity of one year or less, including principal payments on mediumand long-term loans of the public and private sectors falling due within the next 12 months. The government’s net foreign currency deposits with the BSP, proceeds from the issuance of global bonds and gains from gold holdings and overseas investments increased the GIR level in February, the BSP said. See “GIR,” A2
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A broader look at today’s business Monday, March 10, 2025 Vol. 20 No. 149
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INFLATION RISKS FROM n
U.S. TARIFFS FLAGGED By Reine Juvierre S. Alberto @reine_alberto
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HILE the lower February inflation print fueled expectations of the Bangko Sentral ng Pilipinas (BSP) reducing key policy rates, inflationary pressures from higher “Trumphian” tariffs loom. In a commentary by New York-based think tank GlobalSource Partners, country analyst Diwa Guinigundo warned that some precaution is “critical” for the central bank in considering to resume easing its monetary policy stance. “We cannot dismiss the brewing price pressures in the US as a result of the Trumphian higher tariff [more expensive imports], tax cuts [more spending] and strict immigration policies [higher labor costs]. They are all potentially inflationary,” Guinigundo said. Inflation eased to 2.1 percent in February 2025, down from 2.9 percent in January 2025 and 3.4 percent in February 2024. It is also the lowest recorded inflation rate since September 2024’s See “Inflation,” A2
ANILAG ABUNDANCE: FAITH AND FESTIVITY SHINE THROUGH THE RAIN Different municipalities of Laguna showcase their unique renditions of Ani sa Laguna through creatively designed booths and exhibition stalls made from indigenous materials, paying homage to Our Lady of Turumba. Despite the morning rains, devotees participated in a Marian procession and a Holy Mass, celebrating faith and abundance at the Anilag Festival, known as the “Mother of All Harvest Festivals,” at the provincial grounds in Sta. Cruz, Laguna. BERNARD TESTA
LOCAL E-COMM PLATFORMS CAN’T ACCESS PHL GOODS
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HILIPPINE-BASED Ecommerce platforms are forced to source goods from other markets because the current infrastructure design in the country does not bridge e-commerce sellers with local manufacturers, according to Ecommerce experts. “There are manufacturers in different locations that we don’t have access to that can sell cheaper products, cheaper raw materials. Currently, our infrastructure in the Philippines is not designed to make
our manufacturers, our suppliers successful. So a lot of the e-commerce platforms get their supplies from different countries,” Ken Layug, Senior Vice President for Operations at IntouchCX, a global BPO firm, said at the recent forum:, “Looking Ahead: Philippines 2025 How Geopolitics Will Affect Business.” Layug continued: “I think it would be best if the empowerment of the government goes to the different local manufacturers, local suppliers, See “Local,” A2
NG ’24 gross borrowings hit P2.564T for forex, deficit use
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HE national government’s gross borrowings hit P2.564 trillion in 2024, with a greater reliance on domestic debt to mitigate foreign exchange risks while financing the fiscal deficit. Latest data from the Bureau of the Treasury (BTr) showed the government’s gross borrowings rose by 16.92 percent to P2.564 trillion in 2024 from P2.193 trillion in 2023. This is slightly lower than the P2.570-trillion programmed borrowings for the year. About P1.924 trillion was targeted to be borrowed domestically while P646.084 trillion will be
sourced externally. While the government’s borrowings in 2024 were within the programmed amount, Sun Life Investment Management and Trust Corporation (SLIMTC) President Michael Gerard D. Enriquez told reporters recently that the government might increase borrowings in 2025. This would depend on the government’s success in tax collections and expense mitigation measures, according to Enriquez. However, if the government borrows more to plug the fiscal deficit, it could put upward pressure on interest rates, especially for long-
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U.S. COMPANIES RETREAT FROM DIVERSITY COMMITMENTS ANDREY POPOV | DREAMSTIME.COM
See “NG,” A2
PESO EXCHANGE RATES n US 57.2380 n JAPAN 0.3869 n UK 73.7454 n HK 7.3647 n CHINA 7.9036 n SINGAPORE 42.9586 n AUSTRALIA 36.2374 n EU 61.7369 n KOREA 0.0395 n SAUDI ARABIA 15.2639 Source: BSP (March 7, 2025)