GIR dips to $16.15B in Feb

The Bangko Sentral ng Pilipinas (BSP) reported yesterday that the country’s gross international reserves (GIR) stood at $16.150 billion as of end-February 2003, slightly lower compared to the end-January 2003 level of $16.426 billion.

The GIR represents the country’s total holdings of foreign currencies including special drawing rights (SDRs).

According to BSP Acting Governor Amando Tetangco, the current GIR level was comfortable and enough to cover 4.8 months worth of imported goods and payment of services and income.

Tetangco said that at $16.15 billion, the GIR is also equivalent to 2.8 times the country's short-term debt based on original maturity or 1.4 times based on residual maturity.

Short-term debt based on residual maturity refers to principal payments of public and private sectors due within the next 12 months. This means that the current level of GIR is enough to meet these short-term obligations, indicating no shortage of dollars to cause default.

However, the February GIR reflected a slight decline which Tetangco said was due mainly to payments made by the BSP and the National Government to meet their service requirements.

Tetangco said the decrease was partly offset by the deposits of the National Government which just received the proceeds of its seven-year Eurobond flotation and zero-coupon Treasury bills.

The Arroyo administration was able to raise Euro300 million from its Euro500 million Eurobond offer as the market reacted negatively to the possibility that the Philippines would be sanctioned by the Paris-based Financial Action Task Force (FATF).

The Eurobond met a lukewarm reception from investors with an annual coupon rate of 9.125 percent. The bonds were issued at a price of 99.375 to yield 9.25 percent.

Finance Secretary Jose Isidro Camacho told reporters that the order book stood at Euro450 million and the government decided to take the middle since the offer ranged between the Euro259 million minimum and Euro500 million, maximum.

On the other hand, the BSP said its net international reserves (BSP-NIR) as of end-February 2003 was slightly lower at $12.911 billion from $13.129 billion a month ago.

Meanwhile, the BSP also reported that as of as end-September 2002, the system’s lendings to the real estate industry (both bank proper and trust department), amounted to P181.3 billion.

The September level was lower by P2.3 billion or 1.2 percent from P183.6 billion last quarter, and by P8.7 billion or 4.6 percent from year-ago level.

According to the BSP, this quarter’s real estate loans (RELs) accounted for 10.7 percent of total outstanding loans (TOL) inclusive of interbank loans (IBL), lower by 0.4 and 0.8 percentage points from last quarter’s ratio of 11.1 percent and from last year’s ratio of 11.5 percent, respectively.

However, the BSP said there was improvement noted in past due REL whose level was down to P45.9 billion from P50.5 billion last quarter and from P50.2 billion a year ago.

Aside from loans, the BSP said the exposure of commercial banks included investments in commercial papers (CPs) and in equities of real estate companies.

While investments in CPs were on a declining trend (P2.5 billion from P3.3 billion last quarter and P4.3 billion a year ago), equity investments were on a rising trend (P9.3 billion from P8.7 billion last quarter and P6 billion a year ago).

The overall credit and equity exposures of KBs to the real estate industry stood at P193.1 billion or 11.4 percent of TOL, and were on a declining trend in levels (from P195.5 billion last quarter and P200.2 billion a year ago) as well as in ratio to TOL (from 11.8 percent last quarter and 12.2 percent a year ago).