The amount of foreign currency entering the Philippine market pushed the government’s dollar stash, or reserves, higher in October, the Bangko Sentral ng Pilipinas (BSP) said.
More dollars in the stash meant a stronger peso, which meant smaller expenses for industries that buy raw and intermediate materials from abroad using dollars.
Initial data showed the Philippine government now has $85.7 billion stashed as reserves, an increase of $120 million.
BSP Governor Benjamin Diokno said the increase in dollar stash also reflected BSP income from foreign investments.
Payments made for government debts with dollar denomination, however, “tempered” the good news, Diokno added in a press statement.
The total dollar stash, or gross international reserve, as of end October 2019 was enough “liquidity buffer” and covered 7 and a half months of importations and other expenses that use dollars, said Diokno.
If the entire stash would be used to pay foreign debts, it could cover 5 and a half months’ worth of loans maturing according to original schedule and a little over four months’ worth of debts that has a different maturity schedule, he said.
Net dollar reserve, or the difference of gross reserve minus total short-term foreign loan, was higher than in September 2019.
At its lowest level in October 2018, Philippine dollar reserves fell to $74.7 billion. The BSP arrested the decline through aggressive anti-inflation interest rate increases which made peso assets attractive again to investors and fund managers./TSB