July 2012 Philippines int’l reserves hit up $79.3Billion

Philippines' preliminary gross international reserves (GIR) rose to $79.3 billion as of end-July 2012, data from the Bangko Sentral ng Pilipinas showed.

This is higher by $3.2 billion than the end-June 2012 GIR of $76.1 billion.  It has already breached BSP's full-year forecast of between $77.5 and $78 billion.

BSP Governor Amando Tetangco said that the end-July 2012 GIR level could adequately cover 11.7 months worth of imports of goods and payments of services and income.

It is also equivalent to 10.7 times the country's short-term external debt based on original maturity and 6.4 times based on residual maturity.2

Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.

He said that the increase in the end-July 2012 GIR level was due mainly to the foreign exchange operations of the BSP, foreign currency deposits by the Treasurer of the Philippines (TOP), income from investments abroad of the BSP, and revaluation gains on the BSP's gold holdings arising from the increase in the price of gold in the international market.

 "These were partially offset, however, by outflows for the payments by the National Government (NG) of its maturing foreign exchange obligations and foreign currency withdrawals by authorized agent banks (AABs)," Tetangco said.

Net international reserves (NIR), which include revaluation of reserve assets, increased by $3.2 billion to reach $79.3 billion as of end-July 2012, compared to the end-June 2012 NIR of $76.1 billion.

NIR refers to the difference between the BSP's GIR and total short-term liabilities.

Tetangco said that the country's external payments position "continue to benefit from large OFW remittances, rising BPO earnings and the strong capital inflows."

Remittances coursed through banks during the first five months of the year amounted to $8.3 billion, higher by 5.3 percent relative to the level registered in the same period a year ago.

Fund transfers from land-based workers increased by 2.8 percent to $6.4 billion while those from sea-based workers grew by 14.6 percent to $1.9 billion.

Meanwhile, the Philippines registered lower balance of payments (BOP) surplus last June at $14 million, lower than year-ago's $222 million and month-ago's $138 million.

BOP is the difference between a country's foreign exchange inflows and outflows on a particular period and represents the country's total transactions with the rest of the world.

Last June, the central bank trimmed, among others, the BOP target for this year to $2.6 billion from $2.8 billion on account of the weak global economy.


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