PH foreign reserves hit record high of $85.9B in August

MANILA, Philippines – The country's international reserves hit a record high in August of this year.

Preliminary data released by the Bangko Sentral ng Pilipinas (BSP) on Wednesday, September 7, showed that Philippine gross international reserves (GIR) hit $85.9 billion at the end of August.

That's an increase of $390 million from the end-July GIR of $85.51 billion.

The GIR is the sum of all foreign exchange flowing into the country. These reserves serve as cover to ensure that the country does not run out of foreign exchange used to pay for imports or foreign currency debt.

The country's net international reserves (NIR), or the difference between the BSP's GIR and total short-term liabilities, also increased by $390 million to $85.89 billion as of end-August, compared to the end-July NIR of $85.50 billion.

The BSP said the country's reserves as of end-August can cover 10.5 months' worth of imports of goods and payments of services and income.

It is also equivalent to 6 times the country's short-term external debt based on original maturity and 4.3 times based on residual maturity.

Foreign holdings up, gold down

BSP Governor Amando Tetangco Jr said the increase was due mainly to the government's net foreign currency deposits and the BSP's foreign exchange operations as well as income from investments abroad.

Data showed that the government's investments abroad increased by 0.88% to $73.94 billion in August from $73.29 billion recorded in July.

These gains were partially offset, however, by payments made by the government for its maturing foreign exchange obligations and revaluation adjustments on the BSP's gold holdings resulting from the decrease in the price of gold in the international market.

The value of the BSP's gold holdings decreased by 2.8% to $8.26 billion from the $8.5 billion seen in July.

For this year, the BSP sees the GIR hitting $82.7 billion, which is equivalent to 9 months' worth of import cover. – Rappler.com