PH dollar reserves rise to $108 B

Published November 12, 2021, 1:27 PM

by Lee C. Chipongian

The Philippines’ foreign exchange reserves went up to $107.95 billion as of end October this year, $1.35 billion higher than the previous month’s $106.60 billion, said the central bank.

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The latest gross international reserves (GIR) is also higher by $4.15 billion compared to $103.80 billion same period in 2020.

The Bangko Sentral ng Pilipinas (BSP) said Friday, Nov. 12, that the increase in the GIR came from the net foreign currency deposits of the National Government (NG). The NG issued Retail Onshore Dollar Bonds and deposited the proceeds amounting to $1.593 billion with the BSP.

The increase in the value of the BSP’s gold holdings also contributed to the higher GIR. Gold reserves totalled $9.13 billion as of end-October, up from $8.85 billion in September. However, gold holdings are lower against October 2020’s $11.65 billion.

BSP’s foreign investments as of end October amounted to $91.72 billion, up from the previous month’s $89.70 billion and from same period last year of $87.41 billion.

The central bank said the latest GIR level is “more than adequate external liquidity buffer” which is equivalent to 10.8 months’ worth of imports of goods and payments of services and primary income. “Moreover, it is also about 7.8 times the country’s short-term external debt based on original maturity and 5.4 times based on residual maturity.”

GIR is generally considered as adequate if it can finance at least three-months’ worth of the country’s imports of goods and payments of services and primary income. It is also viewed as adequate if it provides at least 100 percent cover for the payment of the country’s foreign liabilities, public and private, falling due within the immediate twelve-month period, said the BSP.

The country’s GIR is expected to climb by as much as $114 billion by end 2021 and $117 billion by 2022.

BSP Governor Benjamin E. Diokno has said that the Philippines has no need to tap any of the existing currency swap arrangements both on the regional and bilateral level, on the back of a still adequate US dollar reserves.

Diokno said the GIR will have “constant” supply of foreign exchange inflows from overseas Filipinos’ remittances, receipts from the business process outsourcing sector, the growing exports, and rising foreign direct investments.

The other source of foreign exchange reserves are banks’ foreign currency deposit units (FCDU).

FCDU assets have reached $54.7 billion as of end-June.

 
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