Forex reserves reach 2-year high

The country’s foreign exchange reserves reached the highest in more than two years at $81.3 billion as of end-February, preliminary Bangko Sentral ng Pilipinas (BSP) data released yesterday showed.

The BSP attributed the bigger amount of gross international reserves (GIR) to revaluation adjustments on the BSP’s foreign currency-denominated reserves and gold holdings resulting from the increase in the price of gold in the international market, net foreign currency deposits by the national government as well as the BSP’s income from investments abroad.

The GIR level in February was higher than the $80.7 billion in end-January as well as the highest since $83.2 billion in December 2013.

The increase in GIR last month, however, was partially offset by the BSP’s foreign exchange (forex) operations as well as the national government’s payments for maturing forex obligations.

The end-February GIR level could cover 10.4 months’ worth of imports of goods as well as payments of income and services, the BSP said.

It was likewise equal to 5.7 times the country’s short-term external debt based on original maturity as well as 4.1 times based on residual maturity, according to the BSP. The BSP defines short-term debt based on residual maturity as outstanding foreign debts that have an original maturity of a year or less, including principal payments on medium- and long-term loans of the government as well as the private sector falling due in the next 12 months.

As for net international reserves, or the difference between the GIR and total short-term liabilities, these also rose to $81.3 billion in end-February from $80.7 billion a month ago.

For 2016, the BSP sees the balance of payments or BOP ending with a surplus of $2.2 billion, which will result into a higher yearend GIR level of $82.7 billion, equivalent to nine months of import cover.

The GIR at end-2015 amounted to $80.7 billion.