GIR drops to $74.77B end-October

By Lee Chipongian

The country’s gross international reserves (GIR) fell to $74.77 billion as of end-October due to outflows and the government’s withdrawal of funds to pay for maturing loans, the Bangko Sentral ng Pilipinas (BSP) said.

 BSP  Governor Nestor A. Espenilla Jr. (Bloomberg) BSP Governor Nestor A. Espenilla Jr. (Bloomberg)

The GIR is lower than end-September’s $74.94 billion and from same time in 2017 of $80.42 billion. The $74.77 billion reserves is the lowest GIR level for 2018 so far.

The BSP has an $80-billion 2018 projection for the GIR. Last year, the GIR closed with $81.57 billion which was higher than 2016’s $80.69 billion.

BSP Governor Nestor A. Espenilla Jr. in a statement said the slightly lower GIR was “mainly (because of) outflows arising from the payments made by the National Government (NG) for its foreign exchange obligations, NG's net foreign currency withdrawals, and foreign exchange operations of the BSP.”

“However, the decline in the GIR level was partially tempered by the revaluation adjustments on the BSP's gold holdings resulting from the increase in the price of gold in the international market and the BSP's income from its investments abroad,” said Espenilla.

The GIR at this level is still considered “ample external liquidity buffer”. It is equivalent to 6.8 months' worth of imports of goods and payments of services and primary income. It is also 5.7 times the country's short-term external debt based on original maturity and 3.9 times based on residual maturity, said the BSP.

As of end-October, the central bank has gold reserves worth $7.85 billion and foreign investments amounting to $59.82 billion.