The country’s gross international reserves (GIR) is unlikely to meet the Bangko Sentral ng Pilipinas’ (BSP) $87-billion target for this year.
As of November 2013, the country’s foreign exchange reserves were recorded at $84.024 billion, $3 billion short from the $87 billion target.
In a chance interview, BSP Governor Amando Tetangco Jr. said that the November level of GIR can be attributed mainly on the negative revaluation of the central bank’s gold holdings.
The central bank said that the GIR inflows were partially offset by payments by the national government for its maturing foreign exchange obligations and revaluation adjustments on the BSP’s gold holdings.
“It’s really the gold negative revaluation because the all the prices were down. The level of GIR could have been higher if not because of the negative revaluation of gold holdings,” he added.
The international reserves are foreign assets that are readily available to and controlled by the central bank for direct financing of payments imbalances and for managing the magnitude of such imbalances.
The reserves consist of holdings of gold, special drawing rights, foreign investments, and foreign exchange, including Reserve Position in the Fund. These assets are valued mark-to-market. Higher reserves help prop up the peso and keeps domestic inflation at bay.