BSP expects forex reserves to hit new highs

GIR to reach a record $83B by year’s end, says gov’t

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The country’s foreign exchange reserves are set to scale new heights this year and the next, as the Bangko Sentral ng Pilipinas expects the figure to hit $83 billion by the close of December, and $86 billion by end 2013.

The BSP said dollar inflows would stay robust amid continuing improvements in the Philippines’ macroeconomic fundamentals.

“We expect a higher surplus in the balance of payments this year, the effect of which may be carried over to 2013,” BSP Governor Amando Tetangco Jr. told reporters Tuesday.

The BSP earlier reported that gross international reserves (GIR) amounted to $82.1 billion at the end of October. That amount would be enough to cover nearly a year’s worth of the country’s imports, and 6.6 times the total outstanding debt owed by the government and private sectors to foreign creditors, the regulator said.

Remittances from Filipinos working abroad continued to be the prime factor that fueled the rise of the country’s foreign exchange reserves. Other factors were foreign portfolio investments, foreign investments in business outsourcing industry, and tourism receipts.

In the first nine months of the year, remittances reached $15.57 billion—up 5.5 percent from the $14.76 billion reported in the same period last year.

Also, foreign portfolio investments to the Philippines are expected to remain significant over the medium term due to the positive outlook on the domestic economy.

According to government economic officials, the inflow of foreign “hot money” can be attributed to the government’s improved fiscal position, healthy pace of economic growth, a stable banking system, and prospects for an upgrade in the country’s credit rating by 2013.

Officials expect the Philippines to attain an investment grade next year following positive ratings actions over the past two years.

Now, all three major international credit agencies rate the Philippines just a notch below investment grade.

In the first 10 months of the year, the Philippines registered a net inflow of foreign portfolio investments at $2.66 billion.

Significant greenback flows into the country allowed the BSP to buy dollars from the market, which beefed up the country’s reserve of foreign exchange.

The BSP buys dollars from time to time to help temper the appreciation of the peso. Currency traders said the peso, which yesterday closed at its highest level in over four years, could have been stronger if not for the BSP’s market intervention.

The peso now hovers in the 40-to-a-dollar territory. At the start of this year, it stood at around 43:$1.

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  • joboni96

    bayaran na lahat ng foreign loans ng gobyerno
    mula sa forex reserves na yan

    ng hindi 1/4 ng national budget pinambabayad sa utang
    at magamit na para sa mga projects

    malaki pa maiiwang forex reserves

    tututulan ito ng mga dayuhan
    para pagkwartahan pa tayo sa interes ng utang
    pati mga collaborator sa gobyerno
    na nakikinabang

    kaya walang b_yag din ang bsp para gawin

    • pilipino

      The dollars in the BSP is not government money, what the govt owns is the capital it infused when the BSP was created in lieu of the old Central Bank, and any dividend therefrom. The BSP is autonomous from the government, the most that the President can do is to appoint the members of the Monetary Board that oversees the functions and operations of the BSP.

      It does not mean that the government can just touch the pile of dollar bills in the BSP, the government has to buy those dollars and they can only buy as much dollars for foreign loan repayments based on what is allowed in the General Appropriations Act which is actually a Law passed annually by Congress specifying how much the government can spend on something, any misappropriation can be a ground for technical malversation case. What the government can do is if they have a lot of savings or if they have collected more taxes than what was projected (budget surplus), then they can always ask Congress for a Supplemental Budget to increase the government’s appropriation for debt servicing.

      On top of that, what the govt can do is buy so much dollars and pay ahead of schedule for this year’s loan repayments to take advantage of the strong peso, but that is on the assumption that the govt has not yet reached the amount appropriated for that purpose for 2012.

      • joboni96

        sa gobyerno yan
        dahil kapital ng gobyerno yan
        as in any bank

        bsp is a government creation and organization

        hwag kang magpalinlang sa mga foreign capitalists
        na gustong ikontrol ang bsp

  • http://pulse.yahoo.com/_NIPR2MWOPGWUNZ4COTAMW7MLKE Mark

    yan ha huwag na kayong mag taka kung bakit next year eh 38 na lang ang dollar, so sobrang dami ng dollars natin eh halos pwede ng mag pamudmod ng tig isang libong dollars sa bawat pamilya…huwag na yung condom (off topic yata). Sa sobrang dami na ng foreign investors dito at yung mga libo libong pinoy na nagkalat worldwide eh di malayong marating natin yung 100Bn dollar reserves sa 2015…huwag lang tangayin ng mga kurakot na politiko at Generals

  • pilipino

    $15.57B for the past 9 months alone? WOW! If our OFWs saved just 1% of that amount collectively they could have already raised enough capital to put up a big commercial bank or OFW BANK. Here’s how:

    1% of $15.57B is  $155.7M. At P40/$1, that 1% savings from remittance money is P6.228B for the last 9 months alone, but all you need to put up a commercial bank is P3B.

    If this trend of remittance volume is maintained, our OFWs can actually collectively raise enough money of at least P7B every year for a huge Corporation that can be listed in the Stock Exchange.

    And the OFWs can branch into Real Estate development and into the Retirement industry catering to the foreign retiree markets like Japan, US and Europe with their huge aging population.

    At hindi pa ito galing sa seryosohang pag-iimpok kasi pabarya-barya lang yung 1% average savings rate.

    1% savings rate means P10 for every P1,000 or just P100 for every P10,000 or P1,000 for every P100,000 that you send home.

    Maaring ang palag agad natin ay “mabigat yun”, pero sa totoo lang mas malaki pa sa 1% ang tinatapon natin pambili ng chocolate kay Junior or pang-load ni Ate o pang-internet ni Kuya at pang-facial ni misis.

    If you don’t believe me that many of our OFWs are wasting their hard-earned money, then at least try this exercise that I strongly suggest – require your family to keep all the receipts of their purchases (any purchases, big or small, pati pisong mani kung meron pang ganun ngayon), kung walang inisyu na resibo kelangan ilista nila anong binili at magkano at sa anong petsa. Just keep the receipts in a large box then when you take your 1 month vacation after 2 years, try to go over those receipts at ibukod mo yung mga resibo ng mga necessities at sa kabilang bukod naman yung mga resibo ng mga unnecessary expenses.

    Then i-total mo yung necessary and unnecessary purchases separately, siguruhin mo lang may katabi ka at baka himatayin ka. The numbers and the ratios that you will see you will help you better understand what I mean that you are actually throwing away money faster than you earn them, courtesy of your loved ones.

    This method of conscientious saving and investing is what I have advocated in ofwbankincubator but I am not sure though if most of our people working abroad dream big other than having a nice house, a bigger than life LED TV and a family car which by the way all depreciate in value everyday and at the same time incur you never-ending monthly expenses like maintenance, dues, taxes, power cost, fuel cost, etc. In real terms these are Liabilities, not Assets.

    At hindi makauwi for good dahil sa dami ng mga hinuhulugan for the next 5-15 years!

    I am not saying that these purchases are wrong or bad ones because you might actually really need them. What I mean is if we plan to simply just have those things rather than owning a huge money-making enterprise, then most likely you will end up having what you wanted, at hanggang doon lang.

    Maybe it’s time to give this a thought.

    • http://pulse.yahoo.com/_JEMNLLYAP5EA7SM3A6QUOGV62Q Chris

      good comment.. eto ang taong nag-iisip at may panagarap. i salute you.

    • oh_noh

      madaling magpayo ugok… pakuya-kuyakoy ka lang dyan sa pinas e!
      masaya ka na sa 30T mong sweldo dyan… pag-aralan mo kug pano pagkasyahin yan sa pamilya mo! magaral ka kung parehas tayo ng kinikita *intiendes?*

      • pilipino

        Sir I make around P300T-P1.3M for every townhouse and single firewall house that I build and sell as a real estate entrepreneur, and I am 1 semester away from my second Master’s, this time business from Ateneo Rockwell – if that is what you mean ‘pakuya-kuyakoy ka lang sa pinas’. I have all the means to do pakuya-kuyakoy in Boracay or in El Nido but making money here back home makes my day.

      • oh_noh

        congrats! wala sa itsura ha :P

      • pilipino

        Yes it may be true as you said, but my BIR Income Tax Return can you an idea, modesty aside.

  • http://profile.yahoo.com/ZCLTTS57ON35ZKKHI3HZVF752M duke

    yung mga OFW na nagpapadala ng dollar ang nagpapalakas ng economy, kaso eventually sila din kawawa (OFW) kasi baba ang exchange rate so the value of their dollars when they come home eh mas mababa na..pag umalis ka ng Jan 2012 @ 1$ = 43php then uwi ka or magpadala ka ngayun..1$=40php…talo…what an irony..tsk. bayani talaga ang mga OFW..

  • oh_noh

    ayon sa peso- dollar rate dito, USD 1: PHP 40.72
    ang indian rupee-dollar, USD 1: INR 50.44

    these two currencies are almost identical in the past few years (INR usually stronger than PHP)

    sino niloloko nitong bsp na mas malakas pa ang ekonimya ng pinas kumpara sa india!?!?

    mga booset!

    • oh_noh

      tanga tong michelle martin na ito (pakawala ni pinoy o isa lang talagang pakawala)!!! alangan namang yung naglalako ng isda ang nagkokontrola ng forex!!! *bo0bo0*

      … buti pa yung magagaling sa economics *pweh* nakakadama ng paglago “kuno” ng ekonomiya :D

    • http://profile.yahoo.com/NY6TKI3I2DEXZKEAIL32GF32YI GERALDINE

      Ano pa ginagawa mo- umuwi ka na sa India

      • oh_noh

        ganito kabobo katulad nitong si geraldine ang mga nasa gobyerno… ang yayabang kung umasta, pero puro kurakot naman ang inaatupag!

    • http://www.facebook.com/profile.php?id=100003712489179 Michelle Martin

      Well, India’s economy is down right now. In fact, its growth rate is below 5 percent. The Philippines grew 7.1 percent.

      Philippine Peso has a higher value than the Indian Rupee now. ikaw ang bwisit. mang mang ka pala e.

      • oh_noh

        pano tataas ang ekonomiya ng pinas, ni pabrika ng bisikleta e wala tayo!!! lahat halos ina-angkat ultimong bigas na kakainin!

        yung pinaniniwalaan nyong magaling na ekonomista, laging naka-neck brace at naka-wheel chair pag kinakasuhan… yun ang pasimuno ng pag manipula ng  forex.

        ito namang administrasyon ngayon, namana yung formula ni bulilit… nagbubulagbulagan na walang hocus-focus ang forex! mga engot, gumising kayo, kunde mabangungot sana kayo!

      • oh_noh

        ulul, ikaw ang utak kalamansi :D”Bangko Sentral seen keeping rates steady”, basahin mo!ibig sabihin nyan, sumobra ang pagmamanipula nila kaya umaalma na ang mga naapektuhan at kinakarma na rin ang mga hunghang *kasama ka dyansa mga hunghang*. gagawin nilang steady “kuno”, sabihin nating 40 pesos to a dollar, tapos bida kunware sila dahil sasabihin nila na hindi nila hahayaang bumaba ng 35:1. yang mga tusong “ekonomista” na yan, dapat 50:1 na ang palitan *naintindihan mo?*

        isa ka pang pulpol na ekonomista :D palibhasa isa ka sa mga konyo konyohan dyan sa pinas :P

    • http://pulse.yahoo.com/_JEMNLLYAP5EA7SM3A6QUOGV62Q Chris

      PH forex is market determined not manipulated. Bako mag comment.. mag research muna. and comparing PH to India is like comparing apples to oranges.. kng balak mong humirit.. wag na.. alam ko naman katulad mo na nahihirapan sa trabaho at gusto lang magsabi kung anu anu kahit wlang batayan.

      • oh_noh

        teka, kelan ba nagsimulang pumabor sa pinas ang forex?
        tumpak, panahon ni gloria na isang magaling na ekonomista!!!!
        tama ka, wag i-kumpara ang pinas sa india, dahil orange ang india, kalamansi lang ang pinas *gets mo?*

      • http://pulse.yahoo.com/_JEMNLLYAP5EA7SM3A6QUOGV62Q Chris

        utak mo kalamansi.. hehhe.. ndi pumabor sa pinas?? or sa ofw? mag-aral ka ng economics.. basic law of supply and demand pra matauhan ka. putak knlng putak wla namang basehan.

        Pls read just in.. .. “Alarmed over peso strength, BSP sets out to curb speculation”. BSP just heard your misery.

      • oh_noh

        ulul, ikaw ang utak kalamansi :D
        “Bangko Sentral seen keeping rates steady”, basahin mo!
        ibig sabihin nyan, sumobra ang pagmamanipula nila kaya umaalma na ang mga naapektuhan at kinakarma na rin ang mga hunghang *kasama ka dyansa mga hunghang*. gagawin nilang steady “kuno”, sabihin nating 40 pesos to a dollar, tapos bida kunware sila dahil sasabihin nila na hindi nila hahayaang bumaba ng 35:1. yang mga tusong “ekonomista” na yan, dapat 50:1 na ang palitan *naintindihan mo?*
        isa ka pang pulpol na ekonomista :D palibhasa isa ka sa mga konyo konyohan dyan sa pinas :P

      • pilipino

        “Dapat P50 na ang palitan”? Gusto mo P50/$1? Taasan mo pa gawin mong P75/$1 at tingnan natin kung gaano kataas ang fuel and energy costs in the PH which can severely affect our industries that generate employment and just how many manufacturers will complain or cut cost by laying off workers or even shut down its operations.

        High energy cost which can also drive up the cost of raw materials and the high transport cost will drive up the selling price of our products for export which is detrimental.

        Masaya nga ang OFWs dahil mataas masyado ang exchange rate pero mas mahal naman ang magiging presyo ng mga bilihin. Imagine if you are paying P3,500 monthly for your power bills, that can go as much as P7,000 at P75/$1 with the same KW of consumption! This is not what you wish, for sure.

        Managing our forex is a balancing act with the objective of promoting (and defending) our economic interests, and it is indeed market dictated. It can be both very costly for us if we want to just allow the exchange rate to float freely or if we want to aggressively restrict its movement because both have their downside.

        Konting aral na lang kuya, maiintindihan mo rin. Kaya mo yan.

  • oh_noh

    pakuyakuyakoy lng ang mga taga-bsp, padagsa ng padagsa ang remittances ng mga kawawang ofw…
    aba, pataasin ba naman ng pataasin ang piso (habang ang mga planta/pabrika sa pinas e nagsasarahan na!), e nabibigla pa kunware sa buhos ng dolyar sa bansa!
    mga hin*ayupak kayp sa gobyerno, maawa naman kayo sa mga ofw!

    • http://www.facebook.com/profile.php?id=100003712489179 Michelle Martin

      tanga. if the government controls the forex mas malaking problema yun. mag aral k kasi ng economics. mang mang

      • oh_noh

        mas tanga ka! lumabas ka ng bansa nang malaman mo kung anong economics yaang nasa kakarampot mong utak!!!

      • http://www.facebook.com/profile.php?id=100003712489179 Michelle Martin

        ikaw ang pinakatanga. the people should not let the government manipulate currencies. that is against freedom of money. 

        ikaw ang lumabas ng bansa at pwede na rin wag ka na bumalik. haha tumira ka sa scarborough para naman may silbi ka!

      • oh_noh

        isa’t kalahating tanga ka pala talaga, bulag at manhid pa!!! e harap harapan nang mina-manipula ng gobyerno ang forex!!!

        strong economy – in paper!!!

  • http://profile.yahoo.com/GHH2IPW7ZSTQX4JCYQWL2BLXOE MarcialA

    how come only 3 billion dollar added every year to national reserve when 10 million ofw with an average monthly salary 700 dollar is sending 7 billion per month where the 4 billion goes.

    • http://www.facebook.com/profile.php?id=100003712489179 Michelle Martin

      san mo nmn nakuha yang 3 billion? the report says “In the first nine months of the year, remittances reached $15.57 billion—up 5.5 percent from the $14.76 billion reported in the same period last year.”

      • http://profile.yahoo.com/GHH2IPW7ZSTQX4JCYQWL2BLXOE MarcialA

        your saying 10 million ofw averaging only 166.666 dollar salary per month of the first 9 month i cant believe it.compute this 15 billion decided by 10 million ofw the answer is devided by 9 month equal 166.66 dollar average per month of the fist 9 month i dont believe.

      • http://pulse.yahoo.com/_JEMNLLYAP5EA7SM3A6QUOGV62Q Chris

        … ofw remittances total more than $20B annually, but why only 3B added to the reserve? 

        forex reserve computation doesn’t only include inflows such as remittances, export receipts, investments, etc. – it also includes outflows like debt and import payments. kng bga ang $3B figure is already net of inflows and outflows.

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