Forex reserves surge to 11-mo high

MANILA, Philippines - The country’s gross international reserves surged to $83.749 billion in December, the highest level in 11 months amid the central bank’s earnings from its investments abroad and foreign exchange operations.

The latest figure was higher than the previous month’s revised $83.572 billion and was the highest since January last year’s $85.274 billion.

“Contributing to the increase in reserves were the foreign exchange operations and income from investments abroad of the BSP as well as foreign currency deposits by the Treasurer of the Philippines,” the central bank said.

“These inflows were partially offset by revaluation adjustments on the BSP’s gold holdings and payments by the National Government for its maturing foreign exchange obligations,” the BSP added.

The GIR indicates a country’s ability to service foreign debt and pay for imports.

The December GIR is enough to cover 12 months’ worth of imports of goods and payments of services and income. This is also equal to 8.4 times the country’s short-term debt based on original maturity and 5.8 times based on residual maturity.

Meanwhile, net international reserves or GIR minus the short-term debts also went up to $83.7 billion as of December from $83.6 billion in November.

The end-2013 GIR of $83.7 billion is slightly below 2012’s $83.831 billion.

Moreover, this is below the BSP’s 2013 GIR assumption of $85 billion. However, BSP Governor Amando M. Tetangco Jr. last month already said the level of reserves in 2013 may sum up to $83 billion to $84 billion due to revaluation adjustments of gold.