The gross international reserves of the Bangko Sentral ng Pilipinas declined $0.51 billion to $80.16 billion as of end-January 2016 from $80.67 billion a month ago due mainly to the government’s settlement of maturing foreign exchange obligations, the regulator said Friday.
Bangko Sentral Governor Amando Tetangco Jr. said the reserves remained sufficient as it could cover 10.2 months’ worth of imports of goods and payments of services and income.
“It is also equivalent to 5.5 times the country’s short-term external debt based on original maturity and four times based on residual maturity,” he said.
Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.
“The decrease in reserves as of end-January 2016 was due mainly to foreign exchange outflows arising from payments by the national government for its maturing foreign exchange obligations and the BSP’s foreign exchange operations,” Tetangco said.
The outflows were partially offset by inflows from the national government’s net foreign currency deposits and income from Bangko Sentral’s investments abroad, and by the revaluation adjustments on the bank regulator’s gold holdings due to the increase in the price of the precious metal in the international market.
Data showed the value of Bangko Sentral’s gold holdings in January improved to $7.040 billion from $6.702 billion in December.
Net international reserves, which refer to the difference between Bangko Sentral’s GIR and total short-term liabilities, also decreased to $80.16 billion as of end-January from the end-December 2015 NIR of $80.66 billion.
Bangko Sentral expects the reserves to increase to $82.7 billion in 2016, or equivalent to 9 months’ import cover, from $80.67 billion in 2015.
The increase would be triggered by the expected improvement in the overall balance of payments position this year to $2.2 billion from $2 billion in 2015.
The current account in 2016 is expected to remain in surplus at $5.7 billion but lower compared with $8.9 billion in 2015 due mainly to the expected large increase in the imports of goods, notwithstanding improvements in the services and secondary income accounts.
