Forex reserves hit new high

MANILA, Philippines - The country’s gross international reserves (GIR) hit a new record high of $85.760 billion in January, nearly beating the official forecast of $86 billion for the year, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

Reserves, which serve as buffer funds in times of external shocks, went up from $83.831 billion posted by end-2012, preliminary data showed.

Funds are now good to cover 12.26 months worth of imports of goods and services, data showed. They are also equivalent to 10.7 times the country’s short-term foreign debt based on original maturity and 5.8 times on residual maturity.

BSP Governor Amando Tetangco Jr., in a statement, attributed the “appreciable increase” to interest from the central bank’s foreign investments and “inflows” from its foreign exchange operations.

In particular, foreign exchange operations – easily BSP’s purchase of dollars to temper the peso’s rise against the dollar – contributed $997.71 million as of January, recording the highest increase of 7.58 percent from December 2012 level.

The central bank has been intervening in the foreign exchange market to tame the peso’s appreciation against the greenback. A strong peso, which was Asia’s second best performer last year, trims the value of dollar export and remittance earnings.

Aside from foreign exchange holdings, BSP’s foreign investments – which accounts for the bulk of the reserves – also contributed to the rise, data showed. This segment rose 2.69 percent to $72.633 billion.

The Philippines also lent more to the International Monetary Fund (IMF). A total of $539.40 million, up nearly one percent, was granted to the multilateral agency, which will pay the amount with interest.

About $1.3 billion, on the other hand, are still in the form of special drawing rights (SDR) or the IMF’s currency, data showed.

Inflows, Tetangco said, were “offset” by outflows as a result of the government’s payment of foreign obligations, withdrawals by the Power Sector Assets and Liabilities Management Corp. and a decrease in price of gold.

The value of BSP’s gold holdings went down to $10.302 billion by end of last month from $10.353 billion last year, figures showed.

Tetangco said net international reserves - GIR minus short-term liabilities - likewise experienced an uptrend to $85.8 billion last month.