THE country’s gross international reserves rose by more than half in the first eight months of the year on the back of strong foreign exchange inflows, the Bangko Sentral ng Pilipinas said on Wednesday.
In a statement, the BSP said the country’s foreign currency holdings jumped by 51 percent to $75.6 billion at end-August from the $49.905 billion in the same period last year. Month-on-month, the GIR inched up 5.11 percent from $71.883 billion at end-July.
The eight-month figure already exceeded the revised full-year forecast of between $74 billion and $75 billion.
BSP Gov. Amando Tetangco Jr. attributed the surge to the foreign currency deposits of the national government representing proceeds from a program loan from the World Bank, as well as to the central bank’s own foreign exchange operations and income from foreign investments.
Also boosting the country’s forex hoard were revaluation gains of the central bank’s gold holdings following the continued rise in the price of gold.
The BSP’s foreign exchange operations gained 28.2 percent to reach $400.05 million from the $312 million last year.
Foreign investments surged by 60 percent to $65.982 billion compared with $41.306 billion in the same eight-month period last year.
Gold holdings grew by 7.02 percent to reach $7.553 billion from $7.057 billion in 2010.
Tetangco said the preliminary GIR could cover 11.3 months worth of imports of goods and payments of services and income.
It was also equivalent to 11.1 times the country’s short-term external debt based on original maturity and 6.6 times based on residual maturity. These are outstanding external debt with original maturity of one or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.
Net international reserves, which include revaluation of reserve assets, also rose by $3.7 billion to reach $75.6 billion at end-August compared with end-July’s $71.9 billion.
NIR refers to the difference between the central bank’s GIR and total short-term liabilities.
The BSP holds international reserves for the foreign exchange requirements of the country in case the domestic commercial banks’ supply of the greenback and other convertible currencies falls short of demand.
The foreign assets that the BSP held are mostly in the form of investments in foreign-issued securities, monetary gold and foreign exchange, of which 13 percent is in the US dollars.
