THE country’s foreign currency reserves helping shield the economy from imbalances in the external sector inched lower in January.
The Bangko Sentral ng Pilipinas (BSP) on Friday reported that the country’s gross international reserves (GIR) aggregated $80.16 billion.
This represented a $510-million reduction from GIR at end-2015 totaling $80.67 billion. The reduction in GIR was attributed by the central bank to outflows arising from payments by the national government for maturing foreign-currency obligations.
Losses arising from the foreign-exchange operations of the central bank were also a factor in the reduction of foreign-currency reserves.
This developed at a time when the local currency the peso has proven volatile as a result of challenges faced by the Chinese economy, including the decline in oil pricesand its own volatile currency.
Despite this, the BSP said the level of GIR the $285-billion economy has accumulated remains ample and sufficient to cover 10.2 months’ worth of imports of goods and payments of services and income.
It is also equivalent to 5.5 times the country’s short-term external debt based on original maturity and four times based on residual maturity.
The increment in reserves could have even been lower, according to the BSP, were it not for the national government’s net foreign-currency deposits, income from the BSP’s investments abroad and so-called revaluation adjustments on the BSP’s gold holdings due to the increase in the price of gold in the international market.
Across the components of the GIR, the upward revaluation of the country’s gold holdings posted the highest gain at $337.9 million.
The largest loss, meanwhile, was recorded in the foreign investments of the BSP at around $1.02 billion.
For this year, the GIR was seen to push higher consistent with the forecast surplus in the country’s balance of payments (BOP) made possible, in part, by stronger global output growth.
In particular, GIR was seen hitting $82.7 billion in 2016.
This should be enough to cover 8.9 percent of the country’s projected imports.