Philippine Gross International reserves (GIR) totaled $83.201 Billion US Dollars at end of August 2013

Philippine country’s foreign-currency reserves (Gross International Reserves), an indicator of the capacity to pay for imports and payment of maturing foreign obligations, continued to trend up in August, traced to increased inflows from revaluation gains on gold holdings, foreign-exchange operations and net foreign-currency deposits made by the Treasurer of the Philippines.

Data from the Bangko Sentral ng Pilipinas (BSP) show the country’s gross international reserves (GIR) totaled $83.201 billion at end-August this year, up $29 million from end-July GIR of $83.172 billion. This was the second month in a row that the country’s reserves increased after having steadily declined in April, May and June this year.

The GIR are foreign assets that serve as a cushion shielding the economy from volatilities in the global markets. The central bank manages the reserves and uses the pool of assets to finance unexpected imbalances from external pressures. These reserves consist of gold holdings, special drawing rights representing unit of currency used by the International Monetary Fund, foreign investments and foreign-exchange reserves.

At this level, the reserves can cover a year’s worth of imports of goods and payments of services and income.

It is also equivalent to eight times the country’s short-term external debt based on original maturity and 5.5 times based on residual maturity.

According to the BSP, the surge of inflows that pushed the GIR higher in August was partially offset by payments for maturing foreign exchange obligations of the national government.

Meanwhile, net international reserves (NIR), or the difference between the GIR and total short-term liabilities, reached $83.195 billion in August. This was $28 million higher than the previous month’s NIR of $83.167 billion.

BSP Deputy Governor for the Monetary Stability Sector Diwa Guinigundo said the Philippines relied on its strong foreign-currency reserves position when the markets were hit by volatilities in August. The decline in the Philippine Stock Exchange index and the weakening of the local currency in August were traced to concerns over the timing of the US Fed’s asset-purchase program, as well as geopolitical issues in Syria.

“This shows that the Philippines possesses sufficient reserves to ride out any turbulent period that we may encounter,” Guinigundo said.

Business Mirror

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