Foreign exchange reserves rose to $79.96B in May ’14

The country’s foreign exchange reserves slightly rose to $79.957 billion at end-May, preliminary Bangko Sentral ng Pilipinas (BSP) data released on Friday showed.

The gross international reserves (GIR) inched up from end-April’s $79.844 billion, but lower than the $81.967 billion at end-May last year.

Dollar reserves serve as the country’s last line of defense against external shocks that could lead to a shortage in dollars, which businesses and the government need to do business with the rest of the world.

According to the BSP, the GIR “remains ample” enough to cover 11.1 months’ worth of imports as well as payments for income and services.

The end-May level is also equal to 6.8 times the country’s short-term external debt based on original maturity and 4.8 times based on residual maturity, the BSP added.

“The increase in reserves was due mainly to the foreign exchange operations of the BSP and the net foreign currency deposits by the Treasurer of the Philippines. These inflows were partially offset by the revaluation adjustments on the BSP’s gold holdings and payments for maturing foreign exchange obligations of the national government,” the central bank said.

The end-May GIR level is the second highest during the first five months, just lower than end-February’s $80.539 billion.

Foreign investments contributed the bulk of the end-May GIR at $69.559 billion. In the same period, gold reserves amounted $7.791 billion; special drawing rights (SDRs), $1.314 billion; foreign exchange, $687.3 million; and reserve position in the fund, $606.2 million.

As for net international reserves (NIR), or the difference between the GIR and total short-term liabilities, an increase to $79.941 billion was recorded at end-May from $79.828 billion at end-April, the BSP said.