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MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) expects the country’s foreign exchangereserves hitting a new record level of $79 billion next year from about $76 billion this year on the back of robust inflows from overseas Filipinos as well as foreign investments.
BSP Governor Amando Tetangco Jr. said in a forum sponsored by the Foreign Correspondents Association of the Philippines (FOCAP) yesterday that the country’s gross international reserves (GIR) would hit a new historic high of $79 billion.
GIR is the sum of all foreign exchange flowing into the country. It is an indicator of the country’s ability to pay for imports and debts in foreign currencies.
Latest data from BSP showed that the country’s GIR hit a new record level of $76.35 billion as of end-November, erasing the previous historic high of $75.94 billion booked last August.
The end-November GIR level was $15.79 billion higher than the $60.56 billion level booked as of end-November last year.
Data showed that the value of the central bank’s gold holdings increased 16.6 percent to $8.06 billion as of end-November from a year-ago level of $6.91 billion and inched up by 1.9 percent from the end-October level of $7.91 billion.
On the other hand, the BSP’s income from its foreign investments jumped 27.2 percent to $66.22 billion as of end-November from $52.04 billion in end-November last year while earnings from foreign exchange operations surged 87.8 percent to $482.57 million from $256.9 million.
The end-September GIR level could cover 11.2 months worth of imports of goods and payments of services and income as well as 10.7 times the country’s short-term external debt based on original maturity and 6.5 times based on residual maturity.
The BSP originally saw the GIR hitting a new record level $63 billion and $64 billion but was later revised to a range of $68 billion and $70 billion and finally to a range of $75 billion to $76 billion. The country’s foreign exchange reserves surged 41 percent to a record $62.37 billion last year from $44.24 billion in 2009.
The central bank recently revised the country’s external payments positionforecasts for this year and next year on the back of the country’s sound macroeconomic fundamentals.
Based on latest projections from the central bank, the BSP sees the country’s balance of payments (BOP) surplus hitting $10 billion instead of $6.7 billion this year and $2.8 billion instead of $4.4 billion. The current account surplus is expected to hit $8.5 billion insted of $5.6 billion this year and to $4.3 billion instead of $1.2 billion next year.
The BOP positon which refers to the difference of foreign exchange inflows and outflows on a particular period and represents the country’s transactions with the rest of the world has already surpassed the revised full-year target of $10 billion from the original target of $6.7 billion.
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