GIR hits new record high of $48.4 billion in June

MANILA, Philippines - The country’s gross international reserves (GIR) rose to a record $48.4 billion at end-June from the revised $47.7 billion in May, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

The BSP earlier said the country’s foreign reserves could exceed its forecast of $49 billion for 2010, which can cover 8.5 months of imports.

The country’s forex reserves are at a record high, but they still rank among the lowest in the region, outpacing only Pakistan and Bangladesh.

Inflows of remittances from overseas Filipinos help boost the country’s foreign exchange reserves. The central bank expects remittances to climb eight percent in 2010, faster than a previous forecast of six percent growth, with more Filipinos taking up jobs overseas.

BSP Governor Amando M. Tetangco Jr. said authorities now see GIR ranging between $49 billion and $50 billion instead of the revised forecast of $48 billion to $49 billion this year. “Our latest GIR forecast is $49 billion to $50 billion for this year,” Tetangco said.

He pointed out that the GIR last month was $738 million higher than the end-May level of $47.689 billion and $8.83 billion higher than the $39.589 billion registered in June last year.

“The increase in the end-June 2010 reserves was due mainly to foreign exchange inflows arising from the foreign exchange operations of the BSP and income from its investments abroad, foreign currency deposits from authorized agent banks and revaluation gains on the BSP’s gold holdings on account of the increase in gold prices in the international market,” Tetangco said.

He added that the country’s international reserves benefitted from the foreign loans availed of by the government to finance the country’s swelling budget deficit.

“Earlier this year we also benefitted by the foreign loans that were secured by the national government. Part of this has become part of the reserves and the other was used by the national government,” the BSP chief said.

Data showed that the central bank’s foreign investments went up by $5.9 billion to $39.843 billion in June from $33.941 billion in the same month last year while its income from foreign exchange operations plunged by $172.69 million to $521.23 million from $693.92 million.

On the other hand, the central bank’s gold holdings surged by $2.148 billion to $6.859 billion in June from $4.711 billion in the same month last year while special drawing rights (SDRs) from lender International Monetary Fund (IMF) increased to $1.073 billion from $10.35 million.

Tetangco said the inflows were partly offset by the payments of maturing foreign exchange obligations of the national government and the BSP. – with abs-cbnNEWS