PH forex reserves near $100-B mark
A logo of Bangko Sentral ng Pilipinas (Central Bank of the Philippines) is seen at their main building in Manila, Philippines March 23, 2016. REUTERS/Romeo Ranoco
MANILA -The Philippines’ gross international reserves (GIR) may have picked up again to reach $99.7 billion at the end of July, thanks mainly to the increase in the value of the Bangko Sentral ng Pilipinas’ (BSP) cache of gold amid rising prices.
Preliminary data at the BSP show that the GIR is again approaching the $100-billion mark after decreasing to $99.4 billion at the end of June.
At the end of July, BSP’s gold holdings were valued at $10.3 billion, up by $291 million from $10.01 billion a month earlier.
Meanwhile, BSP’s overseas investments were pegged at $83.5 billion, down by $162 million from the $83.66 billion recorded in June.
Adequate buffer
“The latest GIR level represents a more than adequate external liquidity buffer equivalent to 7.4 months’ worth of imports of goods and payments of services and primary income,” the BSP said in a statement.
“Moreover, it is also about 5.9 times the country’s short-term external debt based on original maturity and 4.1 times based on residual maturity,” the BSP added.
The GIR is considered adequate if it can finance at least three-months’ worth of the country’s import bill. As of July, such reserves were more than twice the minimum adequate amount.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., noted that the GIR increased after two consecutive months of decline.
Ricafort said that aside from the increased value of gold, there was also a $179-million increase in the BSP’s foreign exchange holdings, to $1.34 billion in July from $1.16 billion in June.
“Still relatively high at $99.7 billion, the GIR could still strengthen the country’s external position, which is a key pillar for the country’s continued favorable credit ratings for the second straight year,” he said.
The economist noted that the Philippines’ sovereign credit ratings from various rating agencies were mostly at one to three notches above the minimum investment grade, which he said was a sign of resilience despite the COVID-19 pandemic that caused downgrades in other countries around the world.
Finance Secretary Benjamin Diokno earlier said the Marcos administration was aiming at earning from at least one of the three major global raters — Moody’s Investor Service, Fitch Ratings andS&P Global Ratings — an “A”-level rating before the end of its term in 2028.
