|
By Maricel E. Burgonio, Reporter
THE country’s dollar reserves continued to
climb last month on account of the proceeds from the sale of the
government’s power-sector assets and the Bangko Sentral ng
Pilipinas’ (BSP) income from investments and foreign exchange
operations.
In a statement, BSP Governor Amando Tetangco Jr.
said the country’s gross international reserves (GIR) rose to
$36.9 billion at end-July, or slightly higher than the $36.7 billion
the month before. GIR stood at $27.9 billion in July last year.
Tetangco expressed confidence the BSP would meet
its reserves assumption of $36.5 billion to $37 billion by the end
of the year. Last year, the country’s GIR reached $33.751 billion.
Despite his bullishness, the central bank
recently borrowed $500 million from the Bank of International
Settlements (BIS) to shore up the country’s dollar stock.
A rising reserve level helps temper consumer
price increases, as the rising amount of foreign exchange boosts the
peso’s value, thus pulling down the cost of imports.
Stronger reserves, however, may also be
inflationary, as the surge in foreign exchange inflows increases
domestic liquidity or the money supply. The Philippines has been
grappling with double-digit inflation in recent months, with price
increases accelerating to a 16-year high of 12.2 percent last month.
Tetangco said major dollar inflows that
contributed to the increase in reserves were deposits by state-run
Power Sector Assets and Liabilities Management Corporation of the
proceeds from the privatization of National Power Corp.’s
generation plants.
Also boosting the country’s dollar inventory
were the BSP’s income from its foreign exchange operations and
investments abroad.
“These receipts were partly offset, however,
by outflows arising mainly from payments of maturing foreign
exchange obligations of the [government] and the BSP,” Tetangco
said.
The current GIR level can cover 6.0 months of
imports of goods and payments of services and income. It is also
equivalent to 5.2 times the country’s short-term external debt
based on original maturity and 3.0 times based on residual maturity,
which includes the current portion of long-term obligations.
Excluding short-term liabilities, the
country’s net international reserves likewise rose by $0.2 billion
to $36.4 billion.
The Institute of International Finance (IIF)
earlier said the Philippines’ foreign exchange reserves are
sufficient to cope with unfavorable global economic conditions.
IIF forecast the country to raise its reserves
to $37.1 billion this year.
Despite the sufficient reserves, it however said
the Philippines’ foreign exchange buffer remains small compared
with Indonesia’s $72.2 billion, Malaysia’s $113.3 billion,
Thailand’s $114.4 billion, and Korea’s $282.5 billion.
Emerging economies are expected to generate a
combined buffer of $3.026 trillion this year from $2.363 trillion
last year.
China will have the biggest dollar stock at
$2.048 trillion while India’s would reach $358.4 billion, the IIF
said.
|
