BSP to raise forex reserves forecast for 2012

The Bangko Sentral ng Pilipinas will raise its projection for the country’s gross international reserves (GIR) for this year after the latest figure topped the $80-billion mark. GRI are defined by the BSP in its Selected Philippine Economic Indicators report (March 2012) as "foreign assets that are readily available to and controlled by the BSP for direct financing of payments imbalances and for managing the magnitude of such imbalances." The 2012 forecast is currently set at a range of $77.5 to $78 billion. However, actual GIR already amounted to $80.8 billion by the end of August, prompting the BSP to consider a higher projection for the full year. “We have to adjust the GIR [projection] upward. The review is ongoing and we will make announcement of the new forecasts soon,” BSP Governor Amando Tetangco Jr. said in a press conference Monday. According to Tetangco, the central bank is currently reviewing latest inflows on foreign exchange to come up with a new forecast for the full year. In June, the BSP actually cut its GIR forecast from the original figure of $79 billion. The cut in the GIR projection to $77.5 billion-$78 billion was done amid earlier observations that foreign portfolio investments were turning lackluster because of the lingering debt crisis in the euro zone. In July, however, foreign portfolio investments picked up because of more upbeat sentiment for emerging markets including the Philippines. Besides foreign portfolio investments, other factors driving the country’s total reserves of foreign exchange are remittances and foreign investments in the business process outsourcing industry. — BM, GMA News