Strong peso helps shore up PH forex reserves

The country’s dollar reserves rose slightly in January as bullish sentiment on the peso encouraged investors to keep their assets denominated in the local currency during the period.

In a statement, Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr. said the country’s gross international reserves rose to $82.13 billion as of end-January 2019, according to preliminary data.

This was higher than the $79.19 billion recorded in December 2018 due mainly to inflows arising from the net foreign currency deposits by the national government, BSP’s foreign exchange operations, revaluation gains from BSP’s gold holdings resulting from the increase in the price of gold in the international market, and the BSP’s income from its investments abroad.

However, the increase in reserves was partially tempered by payments made by the national government to service its foreign exchange obligations.

“The end-January 2019 level of dollar continues to serve as an ample external liquidity buffer and is equivalent to 7.2 months’ worth of imports of goods and payments of services and primary income,” the central bank said.

It was also equivalent to 6.2 times the country’s short-term external debt based on original maturity and 4.2 times based on residual maturity.

Net international reserves, which refer to the difference between the BSP’s gross reserves and total short-term liabilities, likewise increased by $2.94 billion to $82.13 billion as of end-January 2019 from the end-December 2018 level of $79.19 billion.