Forex reserves hit $82 billion in October

MANILA, Philippines - The country’s gross international reserves (GIR) reached a new record high of $82.093 billion in October, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

The end-October level marked a “modest increase” from $82.028 billion posted in the first nine months, BSP Deputy Governor Juan de Zuñiga said in a statement.

GIR serves as buffer in times of external shocks. The latest figure is well above BSP’s 2012 forecast of $77.5 to $78 billion, breached as early as July. The central bank has said a revised outlook will be released this month.

“The modest increase in the end-October 2012 GIR level was due mainly to inflows from the foreign exchange operations and investment income of the BSP,” De Zuñiga said.

“These inflows were offset, however, by foreign exchange outflows for the payments by the National Government of its maturing foreign exchange obligations, as well as revaluation losses on the BSP’s gold holdings resulting from the decrease in the price of gold in the international market,” he explained.

Foreign exchange operations pertain mainly to BSP’s purchasing of dollars meant to tame the peso’s appreciation which trims the value of export earnings and remittances. As of October, income from this segment totaled $834.49 million, 2.74 percent down from $858.02 million in the third quarter.

However, a larger drop was posted by BSP’s gold holdings, which dipped by 4.74 percent to $10.519 billion from $11.043 billion during the same period, data showed.

Declines were offset by the central bank’s foreign investment income that inched up to $68.918 billion, figures also showed.

Reserves are now good to cover 11.9 months worth of imports of good and payments of services and income, De Zuñiga said. They are also equivalent to 11.7 times the country’s short-term external debt based on original maturity and 6.6 times based on residual maturity.