Forex reserves up 20% in 2011

The Philippines’ gross international reserves dipped to a four-month low of $75.1 billion in end-December, the Bangko Sentral ng Pilipinas said yesterday.

However, the reserves were higher by 20 percent or $12.7 billion than the $62.37 billion recorded in December 2010.

The year-on-year increase was attributed to inflows from the BSP’s foreign exchange operations and income from investments abroad, the government issuing bonds and incurring other foreign borrowings, as well as yearly gains in the value of gold holdings and foreign currency.

BSP Governor Amando M. Tetangco Jr. said in a statement that the figure was lower by $1.1 billion compared to the previous month’s $75.2 billion.

Tetangco said the decrease in the reserves level was mainly due to the lower valuation of the BSP’s gold and foreign currency reserves as well as the government’s servicing of its debt.

The BSP chief said foreign exchange reserves as of the end of December could cover 11.1 months’ worth of imports of goods and payments of services and income.