By Lee C. Chipongian
The country’s gross international reserves (GIR) went up by $560 million to $86.39 billion as of end November 2019 from $85.83 billion previously, the Bangko Sentral ng Pilipinas (BSP) said.
The GIR month-on-month increase “reflects the inflows arising from the BSP’s foreign exchange operations and income from its investments abroad, and the National Government’s net foreign currency deposits,” the BSP said.
The current GIR level continues to be “ample external liquidity buffer” as far as the central bank is concerned. It is equivalent to 7.5 months’ worth of imports of goods and services and payments of primary income, as well as 5.6 times the country’s short-term external debt based on original maturity and 4.1 times based on residual maturity.
Last October, the BSP subscribed – and it is one of the first to do so – to the open-funded Green Bonds managed by the Bank for International Settlements (BIS), and this became part of the GIR.
Of the $86-billion level GIR, $15.50 billion are reserve assets deposited overseas including in the BIS, and about $6.50 billion are foreign currency assets including bond investments in the BIS.
The BIS-managed Green Bonds, an investment pool facility, is the BSP’s signal that it is embarking on the “greening” of the finance sector, or green financing in support of an environmentally responsible finance and investment practices.
When the BSP first announced its Green Bond investments, it said that climate change is inevitable and the financial sector “has a significant role to play in pursuing sustainable and inclusive growth in the global economy, the environment, and society.”
The BIS launched its Green Bonds in late September this year in response to a “growing demand for climate-friendly investments among official institutions.”
It said the BIS' green bond fund initiative “helps central banks to incorporate environmental sustainability objectives in the management of their reserves.”
The BSP and other central banks also invest in the BIS’ Asian Bond Fund or ABF2. It includes the Pan-Asia Bond Index Fund and eight single-market funds, and is managed by private-sector fund managers with the BIS as the administrator. The BSP has a floor investment of $200 million in the ABF.