Saturday, 7 March 2009

Philippine GIR climbs to record $ 39.2 B in Feb.

Manila Bulletin

The country’s dollar stocks reached a record high of $ 39.31 billion as of February, up by $100 million from January, the Bangko Sentral ng Pilipinas (BSP) said yesterday.

BSP Governor Amando M. Tetangco Jr. said National Government deposits from its loan from the World Bank and Asian Development Bank boosted gross international reserves (GIR). Other sources of foreign exchange are the central bank’s gold reserves.

BSP said net international reserves (NIR) totaled $ 38.3 billion for the month, up from $ 37.7 billion in January. NIR is the difference between the BSP’s dollar reserves and total short-term liabilities.

Total GIR level is equivalent to 5.9 months of imports of goods and payments of services and income. It can cover up to 4.7 times of short-term external debt based on original maturity and 2.7 times based on residual maturity. (LCC)
For 2009, the BSP is projecting lower GIR of $ 37.5 billion from $ 40 billion last year.

To boost GIR and make sure the country’s balance of payments remain in surplus, BSP is relying on the NG to negotiate more program loans as source of foreign exchange.

BSP was considering several measures to make sure that BOP is well-stocked, including revolving loans from the Bank for International Settlements and getting new credit from the International Monetary Fund (IMF). However central bank officials said there is no need for these backup measures so long as the NG will increase program loans.

Last year, the BSP borrowed $ 500 million from BIS and another $ 200 million gold-backed and securities-backed loan. BSP can borrow up to $ 6.6 billion from the IMF as liquidity buffer or BOP support but officials said this is not an option right now.

For 2009, the NG has a higher commercial borrowing program, recently raising $ 1.5 billion from the international bonds market. The government also raised official development assistance (ODA) loans from $ 1.1 billion to $ 1.6 billion this year. Including bonds sale, NG total dollar-denominated borrowing requirement is $ 3.1 billion.

BSP Deputy Governor Diwa C. Guinigundo said last week that the government should source more funding for infrastructure requirements, for example more ODA financing as means to bring in more dollar inflows. (LCC)

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