The country’s gross international reserves (GIR) dipped slightly to $83.7 billion as of end-December 2013 compared to the year-ago level of $83.831 billion.
End-December GIR was $100 million lower than the 2012 figure. It also missed the Bangko Sentral ng Pilipinas (BSP) $85 billion estimate for 2013.
However, preliminary data from the BSP showed that the country’s international reserves for January to December were higher by $100 million from the revised end-November reserves of $83.607 billion.
“At this level, reserves can adequately cover 12 months’ worth of imports of goods and payments of services and income,” BSP Governor Amando Tetangco Jr. said.
The GIR is also equivalent to 8.4 times the country’s short-term external debt based on original maturity and 5.8 times based on residual maturity, he added.
Meanwhile, the central bank said that the increase in the GIR in November can be attributed to the foreign exchange operations and income from investments of the BSP, as well as foreign currency deposits by the Treasurer of the Philippines.
However, the BSP said that the inflows were partially offset by revaluation adjustments on the BSP’s gold holdings and payments by the national government for its maturing foreign exchange obligations.
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.
On the other hand, the data showed that net international reserves (NIR) also increased by $100 million to reach $83.7 billion as of end-December 2013, compared to the end-November 2013 NIR of $83.6 billion.
NIR refers to the difference between the BSP’s GIR and total short-term liabilities.
For this year, the BSP is seeing a more robust GIR in 2014 at $88 billion, but Tetangco said that in his own projection, the country’s foreign exchange reserves may fall between $86 billion and $87 billion because of gold revaluation.