Philippine dollar reserves rise for fifth straight month in March

A man counts the dollar bills inside a money exchange shop in Manila. AP FILE PHOTO

MANILA, Philippines – A steady inflow of foreign currency boosted the Philippines dollar reserves in March, marking its fifth straight month of increases, the central bank said on Friday.

In a statement, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said preliminary data showed that the country’s gross international reserves rose to $83.2 billion as of end-March 2019 from $82.78 billion as of end-February 2019.

“The GIR level rose due mainly to inflows arising from the national government’s net foreign currency deposits, BSP’s foreign exchange operations and income from its investments abroad,” he said.

This increase in reserves was tempered partially by payments made by the national government for servicing its foreign exchange obligations as well as revaluation losses from the BSP’s gold holdings, resulting from the decrease in the price of gold in the international market.

Diokno said the end-March 2019 dollar reserve level “serves as an ample external liquidity buffer” and is equivalent to 7.3 months’ worth of imports of goods and payments of services and primary income.

It is also equivalent to five times the country’s short-term external debt based on original maturity and 3.4 times based on residual maturity.

Net international reserves — which refers to the difference between the BSP’s gross reserves and total short-term liabilities — likewise increased by $420 million to $83.19 billion as of end-March 2019 from the end-February 2019 level of $82.77 billion.

At its lowest level in October last year, the country’s dollar reserves dipped to $74.7 billion, reversing only after the central bank completed its aggressive string of anti-inflation interest rate hikes, thus making peso-denominated assets attractive once more for investors and fund managers.