(Source: The Manilla Times)By Lailany P. Gomez, The Manila Times, Philippines
Oct. 08--The Philippines' dollar reserves in September breached the full-year forecast set by the central bank.
In a statement, the Bangko Sentral ng Pilipinas (BSP) said the country's gross international reserves (GIR) in the January to September period rose to $53.54 billion, or 25.9 percent higher than the $42.52 billion registered in the same period last year. Month on month, the GIR was 7.2 percent higher than the $49.9 billion in August. Monetary authorities already revised twice their GIR projections this year. The latest forecast is for reserves to hit between $49 billion and $50 billion from an earlier estimate of $48 billion to $49 billion.
BSP Deputy Governor Nestor Espenilla Jr. said the increase in the GIR was mainly brought about by the central bank's foreign-exchange operations, income from investments abroad and proceeds from the national government's issuance of peso-denominated global bonds. Revaluation gains on the BSP's gold holdings and a program loan from the World Bank also contributed to the growth in reserves.
In September, the Philippine government raised $1 billion from its peso-denominated global bonds with tenders reaching more than $13 billion.
The central bank said, however, these inflows were partly offset by payments for maturing foreign exchange obligations of the national government and foreign currency withdrawals by authorized agent banks.
Data further showed that gold holdings, the price of which increased in the international market, grew 47.5 percent to $7.39 billion at end-September from $5.01 billion in the same period last year. Month-on-month, the country's gold stash was worth 4.8 percent higher than the $7.05 billion in August.
The BSP's foreign-exchange operations, however, yielded reserves that were 18 percent lower at $350 million in the first nine months from $428 billion last year. The September figure still was 10 percent higher than the $312 million in August.
The BSP holds international reserves for the foreign-exchange requirements of the country in case the domestic commercial banks' supply of the greenback falls short of demand.
An ample GIR level helps prop up the peso and keeps domestic inflation at bay.
The current reserves level could cover 9.4 months worth of imports of goods and payments of services and income. The BSP said this amount was also equivalent to 9.7 times the country's short-term external debt based on original maturity and 5.3 times based on residual maturity.
BSP officials have been saying that they cannot say what was an adequate or right level of reserves would be given the current economic situation. About 13 percent of the GIR is in US dollars, the central bank said.
Net international reserves (NIR), which include revaluation of reserve assets and reserve-related liabilities, also stood at $53.5 billion at end-September, higher by $3.6 billion than the $49.9 billion in August.
NIR refers to the difference between the BSP's dollar reserves and total short-term liabilities.
The NIR level has been approximating that of the GIR since the central bank settled its outstanding short-term liabilities in September 2009.
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