Saturday, September 8, 2012

Forex reserves hit $80.777 B as of Aug

MANILA, Philippines - The country’s gross international reserves (GIR) breached the $80-billion mark as of August due to higher investment earnings by the Bangko Sentral ng Pilipinas (BSP) and continued buying of dollars to tame the peso’s appreciation against the greenback. Foreign exchange reserves – which serve as buffer funds in time of external shocks – amounted to $80.777 billion in the first eight months of the year, 1.28 percent higher than the revised $79.758 billion in end-July, preliminary BSP data showed. The eight-month figure is also 3.5 percent higher than the BSP’s 2012 forecast of $77.5 to $78 billion which Governor Amando Tetangco Jr. had said is likely to be revised in the fourth quarter. “The significant rise in the end-August 2012 GIR level was due mainly to the foreign exchange operations and income from investments abroad of the BSP, foreign currency deposits by the Bureau of the Treasury as well as revaluation gains of BSP’s gold holdings,” Tetangco said. Foreign exchange operations pertain mainly to BSP’s buying of dollars in order to manage the strength of the peso, which has appreciated by 4.23 percent from January to August this year. Data showed BSP’s foreign exchange holdings amounted to $848.37 million so far. While a strong currency makes imports more affordable, it also causes export products to be expensive abroad resulting in lesser export earnings. It also trims the value of remittances from overseas Filipinos. BSP’s offshore investments also increased to $67.588 billion from $66.958 billion the previous month, Tetangco said. The value of the BSP’s gold holdings also went up by more than half a million dollars after gold prices rose in the world market. Increases were partially offset by payments made by the government to its maturing debts and banks’ foreign currency withdrawals, the BSP chief added. Reserves, data showed, could now adequately cover almost a year worth of imports of goods and payments of services and income. It is also equivalent to 10.9 times the country’s short-term external debt based on original maturity and 6.6 times on residual maturity. Net international reserves – GIR minus BSP’s short-term liabilities – likewise rose to $80.8 billion. - By Prinz P. Magtulis