8-month PH foreign reserves hit $80.8-B

MANILA, Philippines – The Philippine central bank surpassed its year-long foreign exchange reserve target, with reserves reaching US$80.8 billion in the first 8 months of the year on the back of income from investments abroad and higher valuation of the bank’s gold holdings.

The Bangko Sentral ng Pilipinas (BSP) initially set a full-year forecast of $79 billion for the country’s gross international reserves (GIR) but revised it in June to $77.5-$78 billion because of lingering uncertainty stemming from the eurozone crisis and its anticipated impact on remittances.

The BSP attributed the “significant rise” mainly to its foreign exchange operations, income from investments abroad, and revaluation gains on its gold holdings. The bank usually buys dollars in the foreign exchange market to stabilize the value of the peso. This helps boost its GIR position. It, meanwhile, noted that the price of gold increased in the international market, making its holdings more valuable.

GIR is an indicator of the country’s ability to pay for imports and debts in foreign currencies.

According to the BSP, the end-August figure could cover 11.9 months worth of imports of goods and services, and was 10.9 times the country’s short term external debt based on original maturity. – Rappler.com