By LEE C. CHIPONGIAN
The Philippines’ gross international reserves (GIR) amounted to $86.42 billion in January, lower than the $87.84 billion reported at the end of 2019 (December), the Bangko Sentral ng Pilipinas (BSP) said yesterday.
The January GIR is, however, higher compared to same time in 2018 of $82.49 billion.
“At this level, the GIR can cover 7.6 months’ worth of imports of goods and services and payments of primary income. It is also equivalent to 5.3 times the country’s short-term external debt based on original maturity and 4 times based on residual maturity,” according to the BSP.
The GIR is lower in January from December 2019 because of outflows which the central bank said came from the National Government’s foreign exchange withdrawal. “(This was) used mainly to pay its foreign exchange obligations.
However, the decline was partially tempered by the BSP’s net foreign exchange purchases from its foreign exchange operations and income from its investments abroad,” the BSP explained.
In January, the BSP’s foreign investments amounted to $73.97 billion, lower than $75.30 billion of the previous month. The country’s gold reserves remains at $8 billion.
At the end of 2019, the GIR stood at $87.84 billion, more than 10 percent higher compared to 2018’s $79.19 billion, based on BSP data.
Last November, the BSP has revised its GIR projection for 2020 to $86 billion. The previous projection was only $83 billion.
The revised GIR numbers were part of the overall changes in the balance of payments estimate which for 2020, is a BOP surplus of $3 billion. The BSP however still expects a current account deficit of $8.4 billion.
BSP Department of Economic Research Director Dennis D. Lapid has said that the revised estimates for both 2019 and 2020 are based on key considerations such as the more subdued global economic growth outlook, softer global trade growth and continued vulnerability of commodity prices.
Lapid also pointed out to the “lingering uncertainty” of the US-China trade disputes which has “led to volatility in financial markets and downward (influence) in investor/business sentiments.”