Record-high dollar reserve level sustainable, seen rising further

THE COUNTRY’S record-high reserves are expected to climb further due to remittances.

THE ALL-TIME HIGH gross international reserves (GIR) posted as of September is sustainable and will continue to rise as remittances are expected to pour in ahead of the holiday season, officials said on Tuesday.

Asked whether the GIR level — which hit $86.163 billion as of September — will be sustainable, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno told reporters on the sidelines of The Asset’s Philippine Forum: “Yes. Hindi pa nga tayo December e. Nagpi-pick up ‘yun kasi nagpapadala ng mga remittances ‘yung mga OFWs (overseas Filipino workers). (We haven’t even reached December yet. GIR will pick up by then because of the remittances sent by OFWs).”

During the same event, Department of Finance Secretary Carlos G. Dominguez said the all-time high figure is a positive development.

“It’s good. Better than the other way. This will go along to make people confident that the currency is stable,” Mr. Dominguez said.

“Parang (It’s like) that’s our first line of defense as a buffer. So anybody who speculates against the peso, they should consider that,” Mr. Diokno told reporters.

The country’s foreign reserves strengthened to a record high at end-September as the national government’s bigger foreign currency deposits offset payments for servicing foreign exchange obligations, the BSP reported on Monday.

The end-September GIR was equivalent to 7.5 months worth of imports of goods and payment of services and primary income, the central bank said.

It was also equivalent to 5.4 times external debt falling due within 12 months and 3.9 times such short-term debt plus principal payments on medium- and long-term loans of the public and private sectors falling due within 12 months.

“The more than ample store of GIR will help build credibility in the BSP’s ability to provide dollar liquidity in times of need,” ING Bank NV-Manila Branch senior economist Nicholas Antonio O. Mapa said in an email. “The current level of GIR is more than five times our short term foreign currency debt, which should serve notice against would be currency speculators.” — L.W.T. Noble