Foreign reserves hit record high of $84B

THE COUNTRY’S foreign exchange reserves reached a record high of $84.1 billion in November, according to the Bangko Sentral ng Pilipinas.

In a statement, the BSP said Friday that the $84.1 billion in gross international reserves (GIR) was enough to cover a little over a year’s worth of imports.

The reserves were also 6.8 times the country’s foreign currency-denominated debts maturing within a year.

Also, the foreign exchange reserves as of end-November were up by about 10 percent from the P76.21 billion posted as of the same period last year.

The rise in the country’s foreign exchange reserves was mainly due to the BSP’s foreign exchange operations.

The central bank has been buying dollars from the market to help temper an even sharper appreciation of the peso against the greenback.

The appreciation of the peso has hurt the export sector, which said the strong peso made Philippine-made goods more expensive in dollar terms and, therefore, less competitive in the global market.

The peso, which is now hovering at the 40-to-a-dollar territory from the 43:$1 level at the start of the year, has appreciated by nearly 7 percent since January and has become one of the strongest performing currencies in Asia.

The BSP said that under its foreign exchange policy, it lets the market determine the exchange rate, but it does intervene to temper excessive appreciation (or depreciation) pressures.

The BSP said too much volatility of the exchange rate is bad for businesses and the economy.

The rise in the GIR was also traced to foreign loans obtained by the national government and the increase in the prices of gold in the world market. Of the latest amount of GIR, $10.6 billion was accounted for by the country’s gold holdings.

The central bank also said that there was room for the reserves to increase in 2013.