MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) reported yesterday that the country’s foreign exchange reserves hit a new record level of $76.35 billion as of end-November due to the robust earnings from the central bank’s investments abroad and foreign exchange operations as well as revaluation of its gold holdings.
In a statement, BSP Governor Amando M. Tetangco Jr. said the end-November gross international reserves (GIR) level breached the previous all-time high of $75.94 billion booked in August.
The end-November foreign exchange reserves level was $15.79 billion higher than the $60.56 billion level booked as of end-November last year and $520 million more than the $75.83 billion recorded as of end-October.
“The increase in the reserves level at end-November 2011 stemmed from the income from investments abroad and foreign exchange operations of BSP, foreign currency deposits by authorized agent banks and the National Government as well as revaluation gains on the BSP’s gold holdings,” he stressed.
The GIR is the sum of all foreign exchange flowing into the country.
Data showed that the value of the central bank’s gold holdings increased 16.6 percent to $8.06 billion as of end-November from a year-ago level of $6.91 billion and inched up by 1.9 percent from the end-October level of $7.91 billion.
On the other hand, the BSP’s income from its foreign investments jumped 27.2 percent to $66.22 billion as of end-November from $52.04 billion in end-November last year while earnings from foreign exchange operations surged 87.8 percent to $482.57 million from $256.9 million.
The BSP chief pointed out that the inflows were partially offset by outlows consisting of payments of maturing foreign exchange obligations by the national government and the central bank.
Tetangco pointed out that the end-September GIR level could cover 11.2 months worth of imports of goods and payments of services and income as well as 10.7 times the country’s short-term external debt based on original maturity and 6.5 times based on residual maturity.
The BSP originally saw the GIR hitting a new record level $63 billion and $64 billion but was later revised to range of $68 billion and $70 billion and finally to a range of $75 billion to $76 billion. The country’s foreign exchange reserves surged 41 percent to a record $62.37 billion last year from $44.24 billion in 2009.
The central bank recently revised the country’s external payments position forecasts for this year and next year on the back of the country’s sound macroeconomic fundamentals.
Based on latest projections from the central bank, the BSP sees the country’s balance of payments (BOP) surplus hitting $10 billion instead of $6.7 billion this year and the current account surplus (CA) reaching $8.5 billion instead of $5.6 billion this year.
The country’s BOP surplus climbed 8.2 percent to $9.929 billion in the first 10 months of the year from $9.179 billion despite a sharp decline last month due to the reversal of foreign capital inflows. The BOP surplus plunged 92.4 percent to $208 million in October from a surplus of $2.736 billion in the same month last year.
The BOP refers to the difference of foreign exchange inflows and outflows on a particular period and represents the country’s transactions with the rest of the world.
Originally, the BSP sees the country’s BOP position posting a surplus of $6.7 billion this year but was breached as early as August. Last year, the BOP posted a record surplus of $14.4 billion on the back of strong remittances of overseas Filipinos, high earnings of the business process outsourcing (BPO) sector, sustained export growth as well as surging foreign capital flows.
Meanwhile, the BSP decided to retain the growth in OFW remittances at seven percent to $20.1 billion this year and by five percent to $21.1 billion next year.
OFW grew 7.1 percent to $14.756 billion in the first nine months of the year from $13.782 billion in the same period last year on the back of sustained demand for skilled Filipino workers abroad. The bulk or 85 percent of the total remittances in the first nine months of the year came from the US, Canada, Saudi Arabia, United Kingdom, Japan, United Arab Emirates, Singapore, Italy, Germany, and Norway.
The amount of money sent home by Filipinos abroad grew 8.2 percent to a record level $18.76 billion last year from $17.35 billion in 2009 due to the continued demand for skilled Filipino workers abroad as well as the expansion of remittance centers abroad giving OFWs more options to send money to their loved ones in the Philippines.
For 2012, Tetangco said the BSP lowered the BOP surplus projection to $2.8 billion instead of $4.4 billion.
On the other hand, the BSP chief said the CA surplus is expected to hit $8.5 billion insted of $5.6 billion this year and to $4.3 billion instead of $1.2 billion next year. The CA surplus contracted by 7.9 percent to $3.086 billion in the first half of the year from $3.351 billion in the same period last year on the back of higher deficits in trade-in-goods that erased the gains from the higher net receipts in services, income,and current transfers. - By Lawrence Agcaoili
