THE Bangko Sentral ng Pilipinas (BSP) governor assured legislators on Thursday that the Philippines “is in a good position” dollar-wise, and will not need to sell government assets to procure vaccines for the coronavirus disease (Covid-19) in the future.
Talking as a guest resource person in the House of Representatives’ recent webinar on economic affairs, BSP Governor Benjamin Diokno expressed confidence that the Philippines still has enough dollar reserves to manage the economic challenges brought by the pandemic—including the procurement of a potential vaccine for Filipinos in the future.
“So when we hear our President talk that he will sell government assets should there be a vaccine so that every single Filipino can have a vaccine… [you’re saying] we’re in a good place? That we have enough reserves that we don’t need to do that?” Nueva Ecija 3rd District Representative Rosanna Vergara asked.
“Hindi po natin kailangan magbenta ng assets para maka-avail nun…. We are not in that mode,” Diokno said.
Diokno pointed to the country’s high gross international reserves (GIR) as a key source of confidence in the local economy’s ability to withstand further Covid-19 pressures.
“I know this because in the past, I have seen many crises in my life: Marcos’s final years, the Asian financial crisis, the global financial crisis. You know whenever there is a crisis, we run out of dollars to service our debt and our peso depreciates. Ibang-iba po ngayon, ang dami po nating [It’s so different this time, we have so much] dollars,” Diokno said.
Earlier this month, the BSP reported another all-time-high level of GIR to $93.29 billion in June after seeing a $30.5-million increase from its May level.
The country’s GIR is the level of foreign-exchange holdings the Central Bank 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.
Diokno also told the legislators that the BSP is forecasting a continued rise in the country’s GIR despite the gloomy global economy.
He said they project the country’s dollar reserves to hit around $95 billion to $97 billion by year-end.
At its current level, the country’s dollar reserves can cover 8.4 months’ worth of imports of goods and payments of services and primary income. It is also about 7.3 times the country’s short-term external debt based on original maturity and 4.8 times based on residual maturity.
2 comments