Forex reserves widen 42% to record $69 Billion - Philippines June 2011

The Philippines’ foreign exchange reserves widened by 41.7 percent as of end June, boosted by the central bank’s investment earnings and the revaluation of its gold holding.

The Gross International Reserves (GIR) reached a record $68.996 billion as of end-June, or $20.292 billion more than the $48.704 billion recorded a year earlier, Bangko Sentral ng Pilipinas (BSP) Gov. Amando Tetangco Jr. said in a statement Thursday.

International reserves refer to the sum of all foreign exchange flowing into the country.

BSP data showed that income from investments abroad grew 48.2 percent to $59.48 billion from $40.13 billion year-on-year, and the central bank's gold holdings gained 11 percent to $7.62 billion from $6.86 billion on surges in global prices of the commodity.

However, earnings from the BSP’s foreign exchange operations dropped 29.7 percent to $359.13 million from $510.9 million.

Month-on-month, Tetangco said the GIR level in June was $143 million from $68.853 billion.

"The slight increase in the reserves level [month-on month] was due mainly to the foreign exchange operations and income from investments abroad of the BSP," Tetangco said.

A year-end record at $70Billion

Payments by the national government and by the central bank on maturing foreign obligations and the revaluation losses on the BSP's gold holdings helped offset the country’s foreign exchange inflows, Tetangco said citing BSP data.

The end-June GIR level could cover 10.3 months worth of imports of goods and payments of services and income, and 10.2 times the country's short-term external debt on original maturity and 5.9 times on residual maturity.

The GIR will likely reach a record $70 billion this year and $75 billion next year, according to BSP estimates.

On Wednesday, Tetangco told reporters, "I would not rule out that GIR would exceed $70 billion by the year-end."

It surged 41 percent to a record $62.37 billion last year from $44.24 billion in 2009.


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