PHL dollar reserves rise to ‘all-time high’

More from author

Economy needs confidence, not another stimulus–DOF

DESPITE looming calls from various departments and stakeholders, Finance Secretary Carlos Dominguez III believes that pumping more...

BSP to ‘pull out all stops’ to help Covid-hit local MSMEs

BANGKO Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said they are looking at implementing more measures to...

Treasury makes full award of 30-billion 3-year bonds

THE Bureau of the Treasury (BTr) fully awarded the reissued P30 billion on offer for 3-year Treasury...

AMID concerns that the conflict between the United States and Iran could bring risk back to markets, the Bangko Sentral ng Pilipinas (BSP) on Tuesday reported that the country’s dollar reserves hit an all-time high as of end-December 2019.

Preliminary data released by the BSP indicated that the gross international reserves reached $87.86 billion in December, higher than the $86.23 billion posted in November. The GIR as of the end of the year is the highest on record for the Philippines.

The country’s GIR is the level of foreign-exchange holdings the BSP has during a given period. The GIR is a crucial component of the economy as it is often used to manage the country’s foreign-exchange rate against excess volatility.

According to the BSP, the month-on-month increase in the GIR level reflects the inflows arising from its foreign-exchange operations and income from its investments abroad, and the national government’s net foreign-currency deposits.

The inflows could have been higher, it said, if not partially offset by outflows representing payments made by the NG on its foreign-exchange obligations during the month.

Should the country need to draw foreign currency reserves to finance its payables, the current GIR level provides an ample external liquidity buffer that is equivalent to 7.7 months’ worth of imports of goods and services, and payments of primary income.

It is also equivalent to 5.5 times the country’s short-term external debt based on original maturity and 4.3 times based on residual maturity.

Risks flagged

The rise in the country’s GIR comes at a time when several economists are flagging risks to the country’s current account deficit, as well as the value of the local currency against the dollar.

This as rising tensions were seen across the world at the beginning of 2020. Among the risks to markets are the uncertainty of global trade, a muted global growth and, most recently, the US attack in Baghdad that killed a top Iranian general. These were seen to affect local oil prices as well as influence the movement of local currency.

The GIR took a beating toward the end of the year in 2018, plunging to seven-year lows as the BSP battled to smoothen out volatilities in the depreciating value of the local currency against the dollar.

It also came at a time when sentiment was down due to the accelerating inflation, which also peaked at 6.7 percent in September and October.

The GIR hit its lowest level in 2018 at $74.7 billion in October.

- Advertisement -


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

- Advertisement -

More updates

SMART SOLUTIONS FOR SMARTER BUSINESS | Unleashing the fullest potential of Filipino enterprises

Cortex Enterprise Solutions was built to empower Filipino businesses to be on par with the digital...
- Advertisement -

DOF hails PHL’s 3rd Global Bonds offer results

THE Philippines has returned to the international bond market for the third time this year with a $2.75-billion dual tranche 10.5-year and 25-year Global Bonds to boost the country’s budget support. In a statement, the Department of Finance (DOF) said the new 10.5- year global bonds were priced at...

Tepid lending mood blunts BSP tools’ edge

LENDERS’ reluctance to lend and borrowers’ unwillingness to borrow is dampening the effectiveness of the Bangko Sentral ng Pilipinas’s (BSP) massive monetary policy easing, thereby weakening its ability to prop up growth in the midst of a global health and economic crisis. In a press briefing on Thursday, BSP...

Jobless data ‘improves’ but raises new worries

THE latest unemployment data unveiled by government statisticians on Thursday showed a slight improvement but reflected risks confronting the Philippines in renewing consumer confidence, according to local economists. The preliminary Labor Force Survey (LFS) results released by the Philippine Statistics Authority (PSA) showed 3.8 million Filipinos or 8.7 percent...

Liberalization bills on agenda but Cha-cha for next Congress

WHILE other liberalization measures may yet be enacted by the 18th Congress, Speaker Lord Allan Velasco on Thursday ruled out further Charter change (Cha-cha) discussions, particularly the lifting of the economic restrictions, during the term of this Congress. During the 9th Arangkada Philippines Forum 2020 titled Foreign Investment in...
- Advertisement -

More updates

DOF hails PHL’s 3rd Global Bonds offer results

THE Philippines has returned to the international bond market for the third time this year with a...

In case you missed it