Philippine int’l reserves climbed to $107.95B as of end-October — BSP

The Philippines’ foreign currency reserves climbed as of end-October this year as the national government ramped up its deposits with the central bank as well as the increase in gold prices, data released by the Bangko Sentral ng Pilipinas (BSP) showed Friday.

Preliminary data from the BSP showed the country’s gross international reserves (GIR) — a measure of a country’s ability to settle import payments and service foreign debt — stood at 107.95 billion, higher by $1.35 billion from the $106.6-billion as of end-September.

“The month-on-month increase in the GIR level reflected mainly the national government’s net foreign currency deposit with the BSP and upward adjustment in the value of the BSP’s gold holdings due to the increase in the price of gold in the international market,” the central bank said.

The BSP noted that the national government issued retail onshore dollar bonds and deposited the proceeds amounting to $1.593 billion with the central bank.

The latest GIR level represents a more than adequate liquidity buffer equivalent to 10.8 month’s worth of imports of goods and payments of services and primary income.

By convention, GIR is viewed to be adequate if it can finance at least three-months’ worth of the country’s imports of goods and payments of services and primary income, according to the BSP.

Moreover, the end-October 2021 foreign currency reserves is also about 7.8 times the country’s short-term external debt based on original maturity and 5.4 times based on residual maturity.

Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.

The level of GIR, as of a particular period, is considered adequate if it provides at least 100% cover for the payment of the country’s foreign liabilities, public and private, falling due within the immediate 12-month period.

Likewise, the net international reserves, which refers to the difference between the BSP’s GIR and total short-term liabilities, increased by $1.35 billion to $107.93 billion as of end-October from the end-September level of $106.58 billion. — RSJ, GMA News