by Roderick T. dela Cruz
The Philippines’ gross international reserves, supported by strong inflows of remittances, business process outsourcing revenues, foreign portfolio investments and new loans, surged to a new record in end-August 2011, exceeding the newly-revised target of $75 billion for the whole year.
The Bangko Sentral on Wednesday said the GIR, which refers to the stock of foreign exchange and gold holdings, hit $75.559 billion at the end of August, up $3.675 billion or 5.1 percent from the end-July level of $71.884 billion.
The reserves climbed by $25.6 billion or 51.4 percent from the year-ago level of $49.905 billion. The country’s foreign exchange hoard has also easily eclipsed the country’s total foreign debt of $60.948 billion as of end-March this year.
Bangko Sentral Governor Amando Tetangco Jr. earlier said the central bank revised the GIR target for the year to $75 billion from the earlier estimate of just $70 billion, on inflows of dollars into the country.
“Substantial foreign exchange inflows arising from the foreign currency deposits by the national government of proceeds from a program loan from the World Bank, as well as the foreign exchange operations and income from foreign investments of the Bangko Sentral contributed to the build up in the preliminary GIR level as end-August 2011,” said Tetangco.
“Revaluation gains on the Bangko Sentral’s gold holdings following the continued rise in the price of gold further increased the reserves level,” he added.
The price of gold in the world market recently hit a new record of $1,900 an ounce, as investors sought the stability of the bullion market to escape the volatilities in the financial market.
However, the largest contributor to the increase in reserves was foreign investments. Data showed that Bangko Sentral’s foreign investments in US treasuries and other foreign assets rose to $65.983 billion in August from $62.178 billion in July and $41.3 billion a year ago.