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By Maricel E. Burgonio, Reporter
THE Philippines’ dollar reserves ended 2006 at
a record high, according to the Bangko Sentral ng Pilipinas.
BSP Governor Amando M. Tetangco Jr. said the
country’s gross international reserves (GIR) last year stood at
$23 billion, exceeding that year’s target by $1 billion.
Tetangco ascribed the record dollar inventory to
the central bank’s foreign-exchange operations, income from
foreign investments and the national government’s foreign
borrowing. End-December reserves also were $4.51 billion higher than
the previous year.
The end-2006 reserves level would allow the
Philippines to pay for 4.4 months worth of imported goods and
services and income payments. The end-December level also allows the
country to repay four times over its short-term foreign debt, and
2.3 times over its short-term debt based on residual maturity, which
includes interest and other payments on long-term liabilities.
The high reserves level was in spite of the BSP
and the national government’s decision to prepay part of their
external obligations.
The BSP earlier prepaid $220 million in debt
owed to the International Monetary Fund, whereas the national
government settled $72 million in various loans from the Asian
Development Bank (ADB).
Last year’s reserves would have been higher by
$292 million without the prepayments.
Stronger peso allows govt interest savings
The record reserves level has boosted the peso
vis-à-vis the dollar, allowing the government to save on interest
payments for its outstanding obligations last year.
In a statement, the Department of Budget and
Management forecast a 2006 disbursement for debt service of less
than P309.2 billion, which is P30.8 billion lower than the P340
billion programmed for the year.
DBM said that interest payments reached P292.9
billion at end-November, which is P6.5 billion higher than the
amount shelled out for the same period in 2005.
Budget Secretary Rolando Andaya Jr. attributed
the downtrend to a stronger peso, which had stayed below 50 against
the US dollar weeks before 2006 ended. This in turn was due to the
country’s good fiscal position and record-high remittances by
overseas Filipino workers.
Last year’s P340-billion debt-service
allocation was anchored on the foreign-exchange assumption of P56
against the greenback.
This year, interest payments are programmed to
go down to P318.2 billion, a 6.4-percent decrease from last year.
--With Likha C. Cuevas
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