MANILA, Philippines?The country has improved further its ability to pay for expenditure requirements denominated in currencies other than the peso, with its reserve foreign exchange hitting a new record high in February.

The Bangko Sentral ng Pilipinas Friday reported that the gross international reserves (GIR), the country's reserve of foreign currencies and gold managed by the central bank, amounted to $45.71 billion as of end-February, rising from $45.59 billion registered as of end-January.

The latest GIR were also higher than the $38.9 billion posted as of the same month last year.

In a statement, the central bank said the increase in the GIR was a result partly of its foreign exchange operations and income from its investments in instruments issued from abroad.

The BSP purchases dollars from the foreign exchange market from time to time, specifically to temper potentially sharp appreciation of the peso, the rise of which since the start of the year has been a complaint by exporters. Central bank officials said the monetary authority has been intervening in the foreign exchange market to somehow ease the rise of the peso, which could be even stronger if not for the intervention.

The foreign exchange reserves were also boosted by the increase in the prices of gold in the international market, said the central bank. The country's gold holdings were valued at $5.58 billion as of end-February, up from $5.4 billion as of end-January.

GIR indicates a country's capacity to engage in commercial transactions with the rest of the world, largely importation of goods and services and payment of debts denominated in
foreign currencies.

According to the central bank, the latest GIR were enough to cover 9.28 months worth of imports, up from 9.25 months registered as of end-January. The latest GIR were also
equivalent to 4.5 times the country's debts maturing within the short term.

Other usual sources of inflows that boost the GIR are remittances from Filipinos based overseas, export income, foreign direct investments, foreign portfolio investments, and foreign currency-denominated borrowings.

On the other hand, things that reduce the GIR include import payments, settlement of external debts, and investments offshore, among others.

Central bank officials said the fact that the country's GIR continue to rise, even during the height of the global crisis last year, showed that the Philippines' external payments position was virtually unharmed by the turmoil.

They claimed that external liquidity of the Philippines was one of the sources of optimism of foreign investors and creditors, and the international financial community in general.