Foreign debt payments slightly thin January dollar stash

Payments for foreign loans took a dip into the Philippines’ record dollar reserve, thinning it slightly in January.

Latest Bangko Sentral ng Pilipinas (BSP) data showed that gross international reserve settled at $86.42 billion by end January 2020 from its level of $87.84 billion, a record high, at end December 2019.

The slight decline, the BSP said, “reflected outflows arising from the national government’s foreign exchange withdrawal which was used mainly to pay its foreign exchange obligations.”

But together with the withdrawal came foreign exchange earnings from BSP’s forex operations and investments abroad, the central bank said.

At current level, the Philippines’ dollar stash covers 7.6 months of imports and payments of primary income.

It’s also good for 5.3 times of foreign debt coverage based on original maturity and 4 times based on residual maturity.

Net international reserves —the difference between the BSP’s dollar reserves, net of short-term liabilities — fell by $1.42 billion to $86.42 billion by end January 2020.

Earlier this week, BSP Governor Benjamin Diokno said that the Philippines’ dollar stash was sufficient to protect the peso from being banged around by foreign exchange rate fluctuations.

Edited by TSB