Saturday, 8 January 2011

GIR rises to record $62.1b

by Roderick T. dela Cruz
Manila Standard

The gross international reserves climbed to a record $62.1 billion at the end of December last year, as Bangko Sentral accumulated heavy foreign exchange flowing into the country.

“Reserve assets accumulated over the 12-month period stemmed mainly from sustained foreign exchange inflows from merchandise exports, services receipts, overseas Filipinos’ remittances, and direct and portfolio investments,” Bangko Sentral said.

Bangko Sentral Governor Amando Tetangco Jr. said the end-December GIR level rose $1.5 billion from the revised November figure of $60.6 billion. It also grew by $17.9 billion, or 41 percent, in 2010 from the end-December 2009 level of $44.2 billion.

The reserves were more than enough to cover the country’s total foreign debt, estimated at $59.8 billion at the end of September.

Credit rating agency Moody’s Investor Service on Thursday raised its credit rating outlook on the Philippines to positive from stable, on the back of its strong GIR and balance of payments position.

Standard & Poor’s also cited the strong reserves and external payments position of the country in upgrading the credit rating of the Philippines in November last year by a notch.

The country’s balance of payments position yielded a surplus of $13.2 billion in the first 11 months of the year, prompting Bangko Sentral to accumulate reserves in a bid to temper the appreciation of the peso against the US dollar.

The peso gained about 5.4 percent against the US dollar last year and is predicted to become stronger in 2011 due to the healthy BoP position. It closed at 44.15 against the greenback Friday, slightly weaker than Thursday’s finish of 43.92.

Some $803.63 million worth of foreign exchange were transacted at the Philippine Dealing System on Friday, down from the previous day’s $958.55 million.

Bangko Sentral attributed the year-on-year increase in the international reserves to inflows from its foreign exchange operations, income from investments abroad, and revaluation gains on its gold and foreign currency-denominated holdings.

The bank’s foreign investments jumped to $53.175 billion in December from $36.655 billion year-on-year, while gold holdings rose to $7 billion from $5.46 billion.

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