Forex reserves hit new high of $81.878 B

..MANILA, Philippines - The country’s gross international reserves (GIR) posted a new record-high of $81.878 billion in the first nine months of the year, up 1.42 percent from the revised $80.728 billion in end-August, the Bangko Sentral ng Pilipinas (BSP) reported yesterday. The year-to-date tally is almost five percent more than BSP’s 2012 forecast of $78 billion. BSP Governor Amando Tetangco Jr. had said the GIR forecast will be revised upwards this quarter. “The substantial build-up in the end-September 2012 GIR was due mainly to inflows from the foreign exchange operations and income from investments abroad of the BSP, foreign currency deposits by authorized agent banks as well as revaluation gains on the BSP’s gold holdings,” Tetangco said. Foreign exchange operations pertain mainly to BSP’s buying of dollars to temper the strength of the peso, which has appreciated by 4.88 percent from January to September this year. Data showed BSP’s foreign exchange holdings amounted to $809.64 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 alsotrims the value of remittances from overseas Filipinos. BSP’s offshore investments also increased to $68.218 billion from $67.533 billion the previous month, Tetangco said. Value of gold holdings also went up by almost half a billion 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 11.8 months worth of imports of goods and payments of services and income. It is also equivalent to 11.7 times the country’s short-term external debt based on original maturity and 6.5 times on residual maturity. Net international reserves—GIR minus BSP’s short-term liabilities—likewise rose to $81.9 billion. - By Prinz P. Magtulis (Philstar News Service, www.philstar.com)