Saturday, 5 November 2011

Remittances to reach $20B, BPO $10B


International reserves bounce back to $75.8b
by Roderick T. dela Cruz
Manila Standard
http://www.manilastandardtoday.com/insideBusiness.htm?f=2011/november/5/business3.isx&d=2011/november/5

The country’s foreign exchange reserves rebounded with a growth of $600 million to hit $75.814 billion as of end-October 2011, after a slight drop in the previous month, Bangko Sentral reported Friday.

Bangko Sentral Governor Amando Tetangco Jr. said the October gross international reserves rose from just $75.174 billion in September. The figure remained below the record peak of $75.94 billion recorded in August.

Over a 12-month period, the GIR surged $18.7 billion or 32.6 percent from $57.154 billion recorded year-on-year.

“The appreciable buildup in the reserves level at end-October 2011 resulted mainly from the foreign exchange operations and income from investments abroad of the Bangko Sentral as well as revaluation gains on BSP’s gold holdings,” said Tetangco.

The flows were partially offset by payments by the national government on maturing foreign exchange obligations.

At $75.8 billion, the reserves could easily cover the country’s total foreign debt of $61.4 billion as of June 2011, making the Philippines a net capital lender.

Bangko Sentral Deputy Governor Diwa Guinigundo said despite the external challenges emanating from the United States, Europe and the Middle East, the Philippines continues to attract foreign exchange flows including remittances, foreign portfolio investments and business process outsourcing revenues.

He said remittances were expected to contribute more than $20 billion this year while BPO revenues would reach more than $10 billion.

The October GIR is enough to cover 11.2 months worth of imports of goods and payments of services and income. It was also equivalent to 10.6 times the country’s short-term external debt based on original maturity and 6.4 times based on residual maturity.

Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium and long-term loans falling within the next 12 months.

Data showed that Bangko Sentral’s foreign investments jumped to $65.9 billion as of October from $65.7 billion in September and $48.6 billion in October 2010. Gold holdings also went up to $7.9 billion in October from $7.45 billion in the previous month and $6.8 billion a year ago.

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