PH dollar reserves slump to 7-year low

The Philippines’ dollar reserves fell to an over seven-year low of $74.77 billion in October after the government settled more foreign exchange obligations, the Bangko Sentral ng Pilipinas (BSP) said Wednesday.

The country’s gross international reserves (GIR) declined from $74.94 billion at end-September. The October figure was also the lowest since the $71.88 billion in July 2011.

In a statement, BSP Governor Nestor A. Espenilla Jr. blamed the decline in GIR to outflows from the national government’s forex obligations and net foreign currency withdrawals as well as the central banks’s forex operations.

Espenilla said, however, the drop in dollar reserves was partially offset by revaluation adjustments on the central bank’s gold holdings as global prices have gone up and higher income from the BSP’s foreign investments.

Despite the decline, the end-October GIR level  “continues to serve as an ample external liquidity buffer,” Espenilla said.

It can cover 6.8 months’ worth of imports of goods and payments of primary income and services.

The dollar reserve level as of October was also equivalent to 5.7 times the short-term external debt based on original maturity, and 3.9 times based on residual maturity.

As for net international reserves, or the difference between the GIR and total short-term liabilities, these also declined to $74.76 billion in October from September’s $74.92 billion.