Reserves barely changed at end-July

Posted on August 08, 2015

THE COUNTRY’S reserves were almost unchanged at end-July from a year ago and the month prior amid lower income from the Bangko Sentral ng Pilipinas’ (BSP) foreign exchange operations and decline in gold holdings.

In a statement on Friday, the BSP said gross international reserves (GIR) stood at $80.428 billion as of July, a tad lower than the $80.644 billion logged in the comparative 2014 period and also at end-June.

The GIR is composed of central bank assets held in different currencies, gold and special drawing rights, as well as foreign exchange deposits of the government and state-run firms. It indicates a country’s capability to pay for imports and service foreign debts.

The current GIR level can cover 10.6 months’ worth of imports of goods and payments of services and income, the BSP noted. The reserves are equivalent to 6.3 times the country’s short-term external debt based on original maturity and 4.5 times based on residual maturity.

The BSP considers reserves adequate if it can finance three months’ worth of imports or cover 100% of the country’s foreign liabilities.

The data showed that the central bank’s gold holdings fell to $6.864 billion in July from $8.019 billion last year and from $7.377 billion a month earlier.

Likewise, the BSP’s foreign exchange holdings dropped to $612.7 million from $678.3 million a year ago and from $984.6 million as of the first six months of the year.

Similarly, reserve positions in the fund went down to $441.1 million last month from the $602.7 million seen a year ago and almost unchanged from the $444.8 million registered as of June.

Special drawing rights also decreased to $1.190 billion from $1.295 billion last year but were unchanged from end-June.

On the other hand, the central bank’s foreign investments abroad went up to $71.320 billion last month from $70.048 billion last year, and were more than the $70.646 billion logged as of June.

At 2014’s close, GIR stood at a downwardly adjusted $79.540 billion. The year-end tally was significantly lower than the $83.187 billion in reserves seen as 2013 ended as the central bank’s foreign exchange holdings dropped significantly year on year.

It however beat the BSP’s estimate of $79 billion for 2014. This forecast, announced last November, was down from an initial $85.3-billion estimate.

The BSP expects GIR to reach $81.6 billion this year, down from an earlier forecast of $83 billion that was provided last November. -- Daryll Edisonn D. Saclag