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MANILA, Philippines — The country’s dollar reserves, which grew to USD108.54 billion in March 2022, are likely to rise higher as a result of continued openness and economic growth.

Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said in a study released on Friday that the country’s latest gross international reserves (GIR) are among the highest after reaching a record high of USD110.1 billion in December 2020.

Continued improvement of structural inflows to the country, such as overseas Filipino worker (OFW) remittances, BPO sector earnings, foreign tourism revenues, and foreign direct investments (FDIs), are considered positive to the GIR, according to Ricafort.

“Moreover, in light of the recent rising trend in global/local bond yields from record lows, funding preparations as the economy reopens further towards greater normalcy, the continued increase in fund-raising and other investment banking activities by the country’s biggest companies/conglomerates could entail some increase in foreign investment inflows that could add to the country’s balance of payments (BOP) and GIR,” he said.

The country’s GIR by the end of March 2022 is 9.6 months’ worth of imports, far exceeding the international standard of three to four months.

According to Ricafort, the high level of GIR protects the local currency from speculative attacks.

“Thus, near-record high GIR and prospects for new record highs in the coming months could further strengthen the country’s external position,” he added. “This is a key pillar for the country’s continued favorable credit ratings for the second straight year, mostly at 1-3 notches above the minimum investment grade, a sign of resilience despite the Covid-19 (coronavirus disease 2019) pandemic that caused downgrades in other countries around the world.”

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