The country’s dollar reserves declined to $81.347 billion as of end-September due to lower global gold prices and a weak peso, preliminary data of the Bangko Sentral ng Pilipinas (BSP) released on Friday showed.
The gross international reserves (GIR) level in September fell from $86.139 billion in the same month last year, as it is also below the recorded $81.725 billion for end-August.
“The month-on-month decline in the GIR level was due mainly to outflows arising from the revaluation adjustments on the BSP’s gold holdings resulting from the decrease in the price of gold in the international market, payments made by the national government for its maturing foreign exchange obligations, and foreign exchange operations of the BSP,” Deputy Governor and BSP officer-in-charge Maria Almasara Cyd N. Tuaño-Amador said in a statement.
The peso traded at 11-year low levels in September.
The drop in GIR was nonetheless “partially offset by net foreign currency deposits by the national government and income from the BSP’s investments abroad,” Tuaño-Amador added.
The end-September GIR can cover 8.5 months’ worth of imports of goods as well as payments of primary income and services.
Also, the dollar reserves as of September were equivalent to 5.5 times the short-term external debt based on original maturity, as well as 3.6 times based on residual maturity.
The BSP defines short-term debt based on residual maturity as outstanding foreign debt whose original maturity was a year or less, plus principal payments on medium- and long-term loans of the government as well as the private sector that were due within the next 12 months.
As for net international reserves, or the difference between the GIR and total short-term liabilities, these also declined to $81.34 billion in September from the $81.72 billion recorded in August.
In June, the BSP projected 2017 dollar reserves to slightly decrease to $80.5 billion, which is equivalent to 8.3 months of import cover, from $80.7 billion in end-2016. /kga
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