FX buffer edges up as of end-November but smaller than a year ago

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GROSS INTERNATIONAL RESERVES (GIR) — which help shield the country from foreign exchange shocks — edged up as of end-November from their end-October level, propped up by income from the central bank’s investments abroad, but was six percent less than the year-ago amount, according to data released on Friday by the Bangko Sentral ng Pilipinas (BSP).

GIR edged up to $75.486 billion as of end-November from $74.711 billion the preceding month, but was less than the year-ago $80.31 billion.

“… [T]he increase in the GIR level was partially tempered by payments made by the national government for its foreign exchange obligations and its net foreign currency withdrawals, as well as revaluation adjustments on the BSP’s gold holdings resulting from the decrease in the price of gold in the international market,” the central bank said in a press release accompanying the data.

It added that “[t]he end-November 2018 level of GIR continues to serve as an ample external liquidity buffer and is equivalent to 6.9 months’ worth of imports of goods and payments of services and primary income… [and was] also equivalent to 5.8 times the country’s short-term external debt (falling due in the next 12 months)…”

By component, the BSP’s foreign investment income, which contributed 80.9% to GIR, increased to $61.065 billion as of end-November from $59.759 billion the preceding month but was still less than the year-ago $65.179 billion.

The central bank’s gold holdings, which accounted for the second-biggest share of about a tenth, slipped to $7.776 billion as of end-November from $7.854 billion as of end-October and from the year-ago $8.046 billion.

The BSP’s foreign-exchange operations to smoothen movement of the peso’s value against the greenback yielded $4.982-billion inflows as of end-November, smaller than end-October’s $5.434 billion and the year-ago $5.445 billion.

The Philippines’ special drawing rights with the International Monetary Fund (IMF) — a reserve asset representing the amount member-countries can claim from the multilateral lender in US dollar, euro, renminbi, yen and British pound sterling — edged up to $1.184 billion as of end-November from end-October’s $1.183 billion but was below the year-ago $1.2 billion.

Finally, the country’s reserve position in the IMF slipped to $479.1 million as of end-November from $481.4 million as of end-October, but was 8.79% more than the year-ago $440.4 million. — with KANV