Tuesday, 23 February 2010

IMF sees reserves reaching $49.8B

J. Vallecera
Business Mirror

THE International Monetary Fund (IMF) anticipates significantly higher gross international reserves (GIR) for the Philippines this year totaling at least $49.8 billion.

The projection, bared with the release of its public-information notice, or PIN, with the conclusion of its latest consultation with the Philippines under Article Four of the IMF covenant, was nearly $5 billion higher than the actual GIR level posted in 2009.

The number highlights the IMF’s confidence that the Philippines, along with most countries in the region, will ride high in economic terms during the year as market conditions normalize and prices return to precrisis levels.

The IMF executive board in Washington, D.C., where the fund is based, noted the Philippines escaped from widespread recession in 2009 and proved its experts wrong when they said Manila will suffer from the global economic downturn just like most everyone else.

The Philippines posted growth averaging 0.9 percent instead, in terms of the gross domestic product.

In reviewing the economy, the IMF observed that the current account, which keeps track of the flow of trade, held up well last year as the decline in exports was cushioned by waning imports and boosted by resilient remittances.

Overseas Filipino worker remittances totaled higher than expected at $17.3 billion, or past the anticipated level of only $17.1 billion last year.

The level of reserves was boosted in part by the return of capital flows not just to the region as a whole, but to the Philippines in particular, as well.

“With the return of risk appetite, the exchange rate has appreciated and capital flows have resumed, although so far primarily into the corporate and government bond market,” the IMF said.

Its experts now said output growth this year will likely average higher to 3.25 percent, driven higher by private consumption as confidence strengthens and also as remittances pick up.Near-term risks to growth should be broadly balanced and tied to global growth outturn, the IMF said.

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