The country’s gross international reserves climbed 0.6 percent to $81.3 billion in February from $80.8 billion a year ago, on higher foreign exchange holdings of Bangko Sentral ng Pilipinas.
Data from Bangko Sentral also showed the GIR increased from $80.69 billion registered in January this year, despite the financial volatility.
Bangko Sentral Governor Amando Tetangco Jr. said in a statement the increase was due mainly to revaluation adjustments on Bangko Sentral’s foreign currency-denominated reserves and gold holdings resulting from the increase in the price of gold in the international market.
Other reasons for the improved reserves were the net foreign currency deposits by the national government and Bangko Sentral’s income from investments abroad.
“These were partially offset by Bangko Sentral’s foreign exchange operations and payments made by the national government for its maturing foreign exchange obligations,” Tetangco said.
He said at $81.3 billion, the February GIR level could cover 10.4 months’ worth of imports of goods and payments of services and income.
It was also equivalent to 5.7 times the country’s short-term external debt based on original maturity and 4.1 times based on residual maturity. 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.
Net international reserves, which refer to the difference between Bangko Sentral’s GIR and total short-term liabilities, also increased $600 million to $81.3 billion as of end-February 2016 from $80.69 billion in January.
Data showed the value of Bangko Sentral’s gold holdings in February increased to $7.815 billion from $7.040 billion in January.
Bangko Sentral expects foreign reserves to increase to $82.7 billion by end-2016, or equivalent to 9 months’ import cover, from $80.67 billion in 2015.
The projected increase would be led by the expected improvement in overall balance of payments position this year to a $2.2-billion surplus from $2-billion surplus in 2015.
The current account in 2016 is expected to remain in surplus at $5.7 billion, but lower than $8.9 billion in 2015 on expected large increase in the imports of goods, notwithstanding improvements in the services and secondary income accounts.
Bangko Sentral uses the reserves to stabilize the value of the peso against the US dollar to avoid any fluctuation and disruption in the economy. The peso closed at a four-month high of 46.91 against the US dollar on Monday.
Remittances, business process outsourcing revenues and international tourism receipts have offset weak merchandise exports to keep the country’s BoP position in surplus, leading to an increase in foreign reserves in recent years.