THE Philippines’ gross international reserves (GIR) rose to their highest level in more than two years at the end of April, providing a greater buffer for the country from sudden external volatilities, the Bangko Sentral ng Pilipinas (BSP) said on Friday.
Data from the central bank indicated GIR rose 0.58 percent in April to $83.46 billion from $82.97 billion in March. This is the highest level of reserves since the $83.57 billion in November 2013.
The reserves increased 3.23 percent from $80.85 billion in April 2015.
The BSP traced the increase to revaluation gains on its gold holdings “resulting from the increase in the price of gold in the international market,” foreign currency deposits by the national government, as well as the central bank’s income from investments abroad.
These were partially offset by national government’s payments of maturing obligations, the BSP explained.
The latest GIR level is enough to cover 10.4 months of merchandise imports and payments of services and income, the same imports cover as in March, it added.
The end-April dollar reserves are also equivalent to 5.5 times the country’s short-term external debt based on original maturity and 4.1 times based on residual maturity.
“This historic GIR levels buffers the country from sudden volatilities in the international financial markets–as central banks maintain a dovish bias against the prospects of a hike in US interest rates in the next US Federal Reserve meeting–as well as the uncertainties surrounding the May 9 polls which could lend some weakness to the local currency,” Justino Calaycay, A&A Securities Inc. marketing and research head, said.
The BSP expects the country’s foreign reserves to decline slightly to $82.7 billion by the end of 2016.