PH forex reserves hit new high in December
Credit to Author: Mayvelin U. Caraballo, TMT| Date: Tue, 07 Jan 2020 16:25:35 +0000
THE country’s gross international reserves (GIR) reached a new record high of $87.85 billion in December, boosted by the central bank’s foreign exchange (forex) operations and investment income, as well as the government’s foreign currency deposits.
The latest figure surpassed the $86.22 billion recorded in November and the $83-billion projection of the Bangko Sentral ng Pilipinas (BSP) for 2019.
The amount was 1.88-percent and 10.93-percent higher than those posted in November and a year ago, respectively, preliminary BSP data released on Tuesday showed.
In a statement, the central bank said the month-on-month increase “reflects the inflows arising from the BSP’s foreign exchange operations and income from its investments abroad, and the national government’s net foreign currency deposits.”
The latest reserve level was enough to cover 7.7 months’ worth of imports, higher than the 7.5 months buffer in November and the 6.9 months a year earlier, respectively.
It was also equivalent to 5.5 times the country’s short-term external obligations due within one year and 4.3 times based on residual maturity.
Union Bank of the Philippines chief economist Ruben Carlo Asuncion said the December record bode well for the economy’s external position.
“The Philippine economy is better poised to navigate through certain trade and/or foreign currency shocks in the future (if it comes),” he said.
“A building up of GIR level is certainly an advantage for a small-open economy like the Philippines that [is] very vulnerable to global economic shocks, such as oil prices shocks coming from geopolitical risks,” Asuncion added.
Net international reserves, which refer to the difference between GIR and total short-term liabilities, increased to $87.83 billion from $86.21 billion a month earlier.
GIR are foreign assets that are readily available to and controlled by the BSP for direct financing of payment imbalances, and for managing the magnitude of such imbalances. It consists of holdings of gold, special drawing rights, foreign investments, and foreign exchange, including reserve position in the fund.