PH forex reserves soar to 33-mo high in June
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Fri, 05 Jul 2019 16:14:36 +0000
THE country’s gross international reserves (GIR) surged to a 33-month high of $85.379 billion (P4.37 trillion) in June on the back of higher gold prices, the government’s foreign-currency deposits, and the Bangko Sentral ng Pilipinas’ (BSP) foreign-exchange (forex) operations and investment income.
The figure — the largest since September’s 2016’s $86.139 billion — was also 0.02 percent and 10.1 percent higher than those posted in May and a year ago, respectively, preliminary data released by the Bangko Sentral on Friday showed.
In a statement, the central bank said the month-on-month increase was due to “revaluation gains from the BSP’s gold holdings resulting from the increase in the price of gold in the international market; national government’s net foreign currency deposits; BSP’s foreign exchange operations; and BSP’s income from its investments abroad.”
These were partially tempered by payments made by the government for servicing its foreign exchange obligations.
ING Bank Manila senior economist Nicholas Antonio Mapa said the Bangko Sentral “now boasts [of] a formidable cache of reserves to fend off any speculative attack on the currency.”
The country’s latest buffer stock, he added, means that the government can repay all foreign currency obligations due within the next 12 months — almost five times over.
“On top of the GIR, steady flows of OF (overseas Filipinos) remittances and BPO (business process outsourcing) receipts combined with financial flows (foreign direct investments and portfolio inflows) given the Philippines — now [with a] BBB+ rating — (the ability) to fund the nation’s Build Build Build requirements,” Mapa said, referring to the Duterte administration’s ambitious infrastructure program.
The latest reserve level was enough to cover 7.4 months worth of imports, the same buffer posted in May, but higher than the year-earlier 7.1. It was also equivalent to 5.1 times the country’s short-term external obligations due within one year and 3.7 times based on residual maturity.
Net international reserves, which refer to the difference between GIR and total short-term liabilities, increased to $85.36 billion from $85.34 billion a month earlier.
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