By Melissa Luz T. Lopez, Senior Reporter

THE COUNTRY’S foreign reserves dipped in October to hit a near two-year low as the Bangko Sentral ng Pilipinas (BSP) tapped the funds to manage foreign currency swings, the central bank reported yesterday.

Gross international reserves (GIR) slipped to $80.616 billion last month, down from the $80.962 billion tallied in September and 5.3% lower than the $85.106 billion in October 2016. The reserve level is also the lowest since the $80.173 billion logged in November 2015, according to BSP data.

“The month-on-month 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 central bank said in a statement.

The BSP sometimes taps the reserve fund to influence in the daily peso-dollar trading by buying or selling more units in order to temper sharp movements in the exchange rate. The peso traded at the P51 level last month, averaging at P51.3433 as it touched a fresh 11-year-low at P51.77.

BSP Governor Nestor A. Espenilla, Jr. has said the central bank has been employing “tactical intervention” in smoothening out currency fluctuations.

Still, a steady stream coming from the central bank’s offshore investments and net foreign currency deposits held by government supported the reserve stash.

Income from the BSP’s foreign investments dropped to $65.367 billion in October, down by 8.7% from last year’s $71.631 billion although somewhat steady from September’s $65.371 billion. This accounted for 81.1% of the GIR.

Meanwhile, the value of the central bank’s gold holdings steadied at $8.065 billion from a month ago as international prices stood unchanged.

Reserve cash held in dollars totalled $5.541 billion, down from September’s $5.88 billion but jumping from the $3.727 billion tallied during the same period last year. BSP officials have said that a weaker peso spelled trading gains, as the reserves are expressed in the greenback.

Funds placed under the International Monetary Fund (IMF) also slipped to $445 million coming from $448 million a month ago, while the country’s special drawing rights — or the amount which the country can tap under the IMF’s reserve currency basket — remained at $1.198 billion, the BSP said.

Despite the declining GIR level, the foreign currency buffer continues to log above the $80.5 billion estimate given by the central bank for the entire year. However, the amount is already lower than the $80.692-billion reserve stash held as of end-2016.

The reserves can still cover up to 8.4 months’ worth of import payments, which is nearly triple the three-month international standard. It can likewise settle up to 5.4 times the country’s short-term foreign debt when computed on original maturity, and up to 3.6 times based on residual terms.

International reserves are made up of gold, the BSP’s assets held in foreign currencies, country quotas with the IMF, and foreign currency deposits held by government and state-run firms.

The IMF has described the Philippines “sizable” GIR stash as a source of macroeconomic strength, as it provides a substantial buffer given the country’s “exposure to natural disaster and capital flow volatility.”