PH dollar reserves continued slow decline in April

By: - Reporter / @daxinq
/ 06:05 PM May 07, 2018

The Philippines’ dollar reserves continued to dip slightly in April as the central bank spent more hard currency to stabilize the volatile peso and the national government paid off some foreign debt, the Bangko Sentral ng Pilipinas said on Monday.

In a press statement, BSP Governor Nestor Espenilla Jr. stressed that the country’s $80.1 billion in gross international reserves at the end of April served as an “ample liquidity buffer” for long-term investors repatriating funds to their home countries and fund managers moving “hot money” to achieve better yields overseas.


The April 2018 dollar reserve level is slightly lower than the $80.5 billion recorded at the end of March.

READ: Dollar outflows in Q1 blow past BSP’s full year estimate


“At this level, the [dollar reserves are] equivalent to 7.8 months’ worth of imports of goods and payments of services and primary income,” Espenilla said. “It is also equivalent to 5.5 times the country’s short-term external debt based on original maturity and 4.1 times based on residual maturity.”

Persistent dollar outflows dampened the flow of capital into the country in recent months due largely to rising interest yields abroad as central banks of developed nations raised interest rates after the decade-long “quantitative easing” binge.

Espenilla, insisting that there is enough buffer to meet the dollar requirements of exiting fund managers, EARLIER pointed out that the Philippines’ current gross international reserve levels are still double the pre-global financial crisis numbers.

Monetary Board member Felipe Medalla had also said that the central bank can afford to expend as much has $20 billion worth of dollar reserves to satisfy the current trend.

Aside from the BSP’s foreign exchange operations and government debt repayments, the month-on-month decline in the reserve level was triggered by revaluation adjustments on the BSP’s gold holdings resulting from the decrease in the price of gold in the international market.

These were partially tempered by the BSP’s income from its investments abroad and the national government’s foreign currency deposits.

Meanwhile, net international reserves, the difference between the BSP’s gross reserves and total short-term liabilities, likewise decreased by $500 million to $80 billion as of end-April 2018 from the end-March 2018 level of $80.5 billion./vvp


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