Debt payments, FX operations trim GIR

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The Philippines’ gross international reserves (GIR) hit its lowest level in almost two years in October with the Bangko Sentral ng Pilipinas (BSP) attributing the drop to its foreign exchange operations and national government debt payments abroad.

Central bank data released on Tuesday showed the country’s foreign exchange reserves at $80.61 billion for the month, down 0.42 percent from September. A year earlier it was at $85.10 billion.

October’s GIR level was the lowest since the $80.17 billion posted in November 2015.

“The month-on-month decline in GIR level was due mainly to outflows arising from the foreign exchange operations of the BSP and payments made by national government for its maturing foreign exchange obligations,” the BSP said in a statement.


These were partially offset by the central bank’s income from investments abroad and net foreign currency deposits by the national government.

The reserves were enough to cover 8.4 months worth of imports, lower than the 8.5 months in September and the 9.7 months recorded year earlier, central bank data showed.

They were also equivalent to 5.4 times the short-term external obligations due within one year and 3.6 times based on residual maturity.

Sought for comment, Land Bank of the Philippines market economist Guian Angelo Dumalagan said the dip was not something to worry about.

“With strong prospects for the Philippines next year, I believe our reserves could recover easily from this slight decline,” he said.

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