GIR continues to rise, now at $103.8B

Published November 13, 2020, 5:40 PM

by Lee C. Chipongian

The country’s gross international reserves (GIR) is higher end October at $103.814 billion, up by $3.37 billion from end September’s $100.443 billion, the Bangko Sentral ng Pilipinas (BSP) reported Friday.

Photographer: Paul Yeung/Bloomberg file

Compared to same time in 2019, the GIR rose by $17.98 billion from $85.834 billion. The GIR first surpassed the $100 billion mark in September.

The GIR, which remains “more than adequate external liquidity buffer” from inflows such as BSP’s net foreign exchange operations of $3.46 billion during the period, is minus $234 million that the National Government (NG) withdrew to pay for past foreign loans.

The GIR also includes $77 million worth of net NG foreign currency deposits and $49 million from gold holdings’ revaluation gains.

The Philippines’ stock of foreign assets and US dollar reserves can cover up to 10.3 months’ worth of imports of goods and payments of services and primary income. It is also 9.3 times the country’s short-term external debt based on original maturity and 5.4 times based on residual maturity.

As defined by the central bank, the GIR are foreign assets of the BSP invested in foreign-issued securities, monetary gold, and foreign exchange.

A large part of the GIR is BSP’s foreign investments which amounted to $87.517 billion from $84.298 billion end-September. Compared to what was reported same time last year, foreign investments increased by $13.83 billion.

As of end-October, BSP’s gold holdings totalled $11.650 billion from $11.594 billion end-September. Gold holdings were significantly adjusted last July after the BSP reverted from a passive to an active strategy in the management of gold reserves. In end-September 2019, gold holdings only amounted to $8 billion.

The reserves also includes foreign exchange assets of $2.642 billion, up from $2.597 billion previously but down from $2.385 billion same time in 2019.

The BSP’s latest 2020 estimate for GIR is a conservative $100 billion. The new forecast is based on the NG’s higher foreign borrowings for this year to finance COVID-19 expenses, and also take into account the revaluation adjustments from the BSP’s gold holdings.