Thursday, 24 March 2011

G.I.R. hits $64B in February

Business Mirror

THE country’s gross international reserves, or GIR, an indicator of capacity to pay foreign loans and trade-related foreign obligations, stood still higher in February at $64 billion.

A little under $2 billion was added during the month as the stock of foreign currency made up mostly of the US dollar, the Japanese yen and the euro increased from January GIR of $62.1 billion.

“International reserves continue to grow and as of end-February reached $64 billion, a new record high,” Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. said at the annual convention of the Chamber of Thrift Banks held at the Dusit Hotel in Makati City.

Tetangco said such reserves provide the economy with sufficient cushion against possible external strains such as the relative scarcity of global credit due to risk-averse investors, among other reasons.

He previously estimated the reserves would reach $68 billion to $70 billion by year’s end as foreign capital continues to flow inward, global trade grows and the remittances of overseas Filipinos prove resilient in the face of increased global difficulties.

At the sidelines of chamber activities, Emilio Neri Jr., economist at the Bank of the Philippine Islands, said the Philippines has effectively become a net exporter of foreign capital in 2010 as its foreign-exchange reserves grew larger than its foreign debt.

“This year the Philippines is expected to remain a net exporter of capital still,” he said.

Records show that at end-2010 the country’s foreign debt totaled only $59.8 billion, while its foreign-exchange reserves already stood at $62 billion.

This much foreign currency in the financial system was also seen to help the peso to strengthen to P41 or P42 per dollar during the year, and Neri was optimistic the peso would likely strengthen to P42 per dollar by year’s end.

In addition, Neri said domestic interest rates were not likely to move up significantly during the year because the system is considered very liquid.

As fund managers endeavor to create more wealth than was possible in the recent past, consumer lending was seen to accelerate, helping push the economy forward, Neri said.

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