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PHL dollar reserves slip to $81.2 billion in January.

Efforts by the Bangko Sentral ng Pilipinas (BSP) to put order in the foreign-exchange market helped push the country's dollar reserves lower in January.

Latest data from the BSP showed the country's gross international reserves (GIR), representing the country's holdings of foreign currency and gold, fell during the month to only $81.2 billion.

The BSP, in a statement, said the decline was 'marginal' and $400 million short of the December foreign-currency reserves of $81.6 billion. It was also $170 million lower than the January 2017 GIR of $81.38 billion.

'The month-on-month marginal decline in the GIR level was due mainly to outflows arising from the foreign-exchange operations of the BSP and payments made by the national government for its maturing foreign-exchange obligations, the BSP said.

Among analysts, Central Bank speaks citing foreign-exchange operations is really shorthand for the buying and selling of foreign currency to achieve a particular exchange rate advantageous to the $305-billion economy.

Data show that both the BSP's income from foreign investments, as well as gains from its foreign-exchange operations were down during the month, with foreign investments hitting $65.36 billion, from the previous month's $65.82 billion, while foreign-exchange inflows stood at $5.7 billion, from $5.78 billion last December.

The local currency averaged P50.509 per dollar in January, weaker than the P50.395 per dollar set in December last year.

The BSP also said the decline could .have been larger were this not partially tempered by the foreign-currency deposits of the national government and by so-called revaluation adjustments on the BSP's gold holdings resulting from the increase in the price of gold in the international market.

The BSP's gold holdings increased significantly from December 2017's $8.34 billion to $8.5 billion in January this year.

Despite the decline, the BSP maintained that the current level of GIR remains sufficient to cover the country's requirements.

'[The] GIR represents more than ample liquidity buffer and is equivalent to 8.2 months' worth of imports of goods and payments of services and primary income. It is also equivalent to 5.8 times the country's short-term external debt based on original maturity and 4.2 times based on residual maturity,' the BSP said.

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Publication:Business Mirror (Makati City, Philippines)
Date:Feb 8, 2018
Words:443
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