THE country’s dollar reserves against potential external balances went down to its lowest level in seven years in September this year, latest data from the Bangko Sentral ng Pilipinas (BSP) showed.
The Philippines’s gross international reserves (GIR) was gauged at $75.16 billion as of end-September this year, registering about a $2.8-billion decline from the previous month. Compared to the same month of the previous year, however, the decline was more
sizable at $5.8 billion.
This is the country’s lowest GIR in more than seven years. The last time GIR was lower was in July 2011, when it hit $71.88 billion.
The BSP put the blame on the outflows arising from its foreign- exchange operations, as well as the payments made by the national government for its maturing foreign-exchange obligations, and revaluation adjustments on the BSP’s gold holdings.
Reserves from foreign-exchange operations went down by about a billion dollars in a month alone, from August’s $6.68 billion to $5.85 billion in a month’s time.
The BSP earlier vowed to keep its presence in the foreign-exchange market to smoothen out any volatility that may be detrimental to the economy.
The peso averaged 53.942 to a dollar in September—weaker than the 53.274 to a dollar in the previous month and the 51 to a dollar average in September 2018.
Its gold holdings also declined during the month from $7.62 billion in August to $7.58 billion in September. The BSP said this was due to the decline of the price of gold in the international market.
BSP not alarmed
The BSP, however, expressed no concern about the drop in the country’s level of reserves.
In a statement, the BSP said at this level, the GIR “nonetheless continues to serve as an ample external liquidity buffer.”
The $75.16-billion GIR in September, according to the BSP, is still equivalent to 6.8 months’ worth of imports of goods and payments of services and primary income.
It is also equivalent to 5.9 times the country’s short-term external debt based on original maturity and 4.2 times based on residual maturity.
The BSP also said the decline could have been larger, if not tempered by the national government’s foreign currency deposits.
Image credits: Nonie Reyes