Gross international reserves climb at end-Jan.

THE COUNTRY’S foreign exchange reserves saw a slight pickup as the year opened on the back of higher gold valuations and gains from currency trading that helped offset a slip in the income derived from the central bank’s foreign investments.

Gross international reserves (GIR) totalled $81.044 billion in January, rising from the $80.692 billion tallied in December 2016, data from the Bangko Sentral ng Pilipinas (BSP) showed. This ended a three- month streak of declining reserves seen since a record-high $86.139 billion logged in September 2016.

In a statement, BSP Deputy Governor Nestor A. Espenilla, Jr. attributed the increase to higher net foreign currency deposits held by the national government, coupled with upward adjustments in international gold valuations and gains made from foreign exchange.

A steady stream of foreign investments also helped keep the reserve level as an ample cover for Philippine transactions, the central bank said.

Income from the BSP’s foreign investments totalled $68.156 billion, down from the $68.29 billion tallied at end-December. This was also 4.3% lower than the $71.22 billion profits generated in January 2016, according to BSP data.

The central bank sometimes taps into the reserve money as it steps in during daily foreign exchange trading to temper any sharp swings of the peso versus the dollar, in keeping with their goal of maintaining price and financial stability.

The BSP is said to have kept an active presence during currency trading last month as it sought to keep the peso at the P49 level versus the dollar.

The peso again touched P50 during intraday trading on Jan. 19, driven largely by hawkish comments made by Federal Reserve chair Janet L. Yellen on planned rate hikes in the United States and ahead of President Donald J. Trump’s inauguration. The local unit finished at P49.98 versus the greenback that day, its weakest showing in a month. As a result, the BSP’s foreign exchange holdings surged to $3.663 billion, nearly five times higher than the $825.9 million from a year ago. It also picked up from December’s $3.563 billion level.

BSP Deputy Governor Diwa C. Guinigundo previously said that a weaker peso actually spelled trading gains for the central bank, as the reserves are expressed in dollars.

The central bank also secured gains from its gold holdings as valuations in the international market went up. Gold reserves amounted to $7.642 billion, 8.5% higher than last year’s $7.041 billion.

Reserves parked with the International Monetary Fund (IMF) went up to $445.5 million, climbing from December’s $441.6

million and from $ 437 million the year prior. In contrast, the country’s special drawing rights (SDRs) — or allowed claims to the “freely usable currencies” under the IMF’s reserve basket — steadied at $1.138 billion.

The central bank expects the GIR to reach $ 84.7 billion this year. In 2016, total reserves missed the BSP’s $ 83.7- billion forecast, but still picked up from $ 80.667 billion logged at end2015.

International reserves are made up of gold, BSP assets expressed in various foreign currencies, country quotas with the IMF, and foreign currency deposits of government and staterun firms. It is used as the primary measure of external buffers and serves as a key indicator for the country’s macroeconomic footing.

Despite the slip in total reserves, the amount continues to be a comfortable buffer for the Philippine economy, the central bank said, able to cover 9.2 months’ worth of import duties for goods and services.

It can also settle 5.8 times of the Philippines’ short-term foreign debt based on original terms, and 4.1 times when computed using residual maturity.

International observers have repeatedly commended the BSP’s hefty reserves, saying it arms the economy with more than enough buffers to weather any shocks from global economic developments.