By Lee C. Chipongian
The country’s gross international reserves (GIR) increased to $85.18 billion as of end-July from $84.93 billion previously, according to Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno.
Based on preliminary data, the month-on-month small improvement came from inflows from the central bank’s foreign exchange operations and investment income.
Part of the GIR also came from the National Government's (NG) net foreign currency deposits during the period. The NG withdraws from the BSP from time to time to pay for maturing obligations.
At this current level, the GIR is still at “ample (external liquidity) buffer” and is equivalent to 7.4 months' worth of imports of goods and payments of services and primary income, said the BSP. It is also equivalent to 5.2 times the country's short-term external debt based on original maturity and 3.8 times based on residual maturity, it added.
The BSP has a 2019 GIR projection of $83 billion (made in June) which was a higher estimate than its previous $77 billion (November 2018).
The GIR surpassed the P83-billion level in March. So far, the country’s buffer reserves reached its peak in May when it hit $85.36 billion.
Diokno has said that they will determine what they could consider the GIR’s optimal level and is studying the metrics.
Of the $85.18-billion reserves, $72.76 billion are foreign investments. These foreign currency reserves are in securities and deposited in other central banks, the International Monetary Fund (IMF) and the Bank for International Settlements.
About $8 billion are the gold reserves of the BSP. The rest are reserved fund in the IMF.
Diokno noted that there are “opportunity costs” when the GIR is rising.