PH forex reserves rose to $95.1B in November

The country’s gross international reserves (GIR) rose for the second month in a row to $95.1 billion at the end of November from $94 billion the previous month, after decreasing for seven months straight from $107.8 billion in February to $92.98 billion in September, according to data from the Bangko Sentral ng Pilipinas (BSP).

The BSP said the latest GIR level,  that was aided in part by the government’s issuance of global bonds in October and continuing growth in remittances, represented a more than adequate external liquidity buffer equivalent to 7.2 months’ worth of imports of goods and payments of services and primary income.

Also, the GIR is about 5.8 times the country’s short-term external debt based on original maturity and 3.8 times based on residual maturity.

Bangko Sentral ng Pilipinas Governor Felipe Medalla said on Tuesday that while the regulator remained active in the foreign exchange markets to ensure the stability of the peso against the US dollar, it was no longer in a situation of always dipping into the GIR.

“It used to be that we were always a net seller of [US dollars],” Medalla reiterated. “Now, [our trading activities] go both ways, sometimes selling, sometimes buying.”

Also in November, the country’s balance of payments swung back to a deficit at $756 million in November, more than six times as wide as the $123-million deficit recorded in the same month of 2021 as the government serviced foreign debt while the Philippine peso was emerging from weakest levels against the US dollar.

The November readout comes after the BSP recorded a surplus of $711 million in the country’s transactions with the rest of the world last October.

Results for November brought the 11-month BOP to a deficit of $7.88 billion, which counters a $353-million surplus in the same period last year.

The BSP said in a statement the January-November BOP deficit was due to the widening imbalance of the trade in goods in favor of the rest of the world, as goods imports continued to surpass goods exports amid increased international commodity prices.

On Tuesday, the peso closed at 55.23:$1, much improved from its record weakest of 59:$1 in October yet still far from 51:$1 at the end of 2021, suggesting that the peso’s weakness is no longer aggravating the impact of high inflation in the country.

“The period of a strong dollar is gone, and the weakness of the peso that further aggravates inflation is no longer a problem,” Medalla told reporters. @RonWDomingoINQ