Forex reserves down to $81.13B

The country’s dollar reserves declined month-on-month to $81.132 billion in February amid a weaker peso, Bangko Sentral ng Pilipinas data released Tuesday showed.

The gross international reserves (GIR) level last month was lower than January’s $81.376 billion, although still higher than end-2016’s $80.692 billion.

In a statement, BSP Governor Amando M. Tetangco Jr. attributed the month-on-month drop mainly to “outflows arising from the BSP’s foreign exchange operations and the payments made by the government for its maturing foreign exchange obligations.”

The peso has fallen to the 50:$1 level, the lowest in more than 10 years, since mid-February.

The decline in dollar reserves was nonetheless “offset by net foreign currency deposits by the national government (which include the net proceeds from the new money component of the ROP global bonds issuance) and revaluation adjustments on the BSP’s gold holdings resulting from the increase in the price of gold in the international market,” Tetangco said.

In January, the Philippine government sold $500 million in new global bonds while also successfully switching $1.5 billion in previously issued bonds to fund the higher infrastructure spending requirement of the Duterte administration.

The GIR as of end-February can cover 9.2 months’ worth of imports of goods as well as payments of income and services.

The dollar reserves were equivalent to 5.9 times the short-term external debt based on original maturity, as well as 4.3 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.

Net international reserves, or the difference between the GIR and total short-term liabilities, also decreased to $81.13 billion in February from $81.37 billion a month ago.

For 2017, the BSP had projected dollar reserves to rise to $84.7 billion, equivalent to 8.8 months of imports. —BEN O.DE VERA