GIR slightly down at $80.1 B in March – BSP

The country’s gross international reserves (GIR) were slightly lower end-March to $80.127 billion compared to the previous month’s $80.431 billion, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

BSP Deputy Governor Cyd Tuanio-Amador said the lower GIR was because of “outflows arising from the foreign exchange operations of the BSP and payments made by the National Government for its maturing foreign exchange obligations.”

The government’s net foreign currency deposits and revaluation adjustments to the central bank’s gold hoard due to higher global gold prices “partially tempered” the withdrawals of reserves.

The state deposits were part of proceeds from the Duterte administration’s recent issuance of renminbi-denominated bonds or the Panda Bonds worth $230 million.

Tuano-Amador said the GIR at the end of the first quarter is still considered an “ample external liquidity buffer” and is equivalent to 7.8 months' worth of imports of goods and payments of services and primary income. It is also equivalent to 5.6 times the country's shortterm external debt based on original maturity and 4.1 times based on residual maturity.

The BSP estimates this year’s GIR will close at $80 billion, lower than $81.6 billion in 2017.

The BSP’s lower projection stems from the projected overall balance of payments (BOP) projection of $1 billion deficit for this year, while the current account deficit is seen to increase to $700 million with the faster growth of imports versus exports. But, the current account deficit is a manageable shortfall as far as the BSP is concerned since it is only 0.2 percent of GDP.

In the meantime, the financial account is expected to improve slightly this year because of increased foreign direct investments. The BSP’s FDI estimates is $8.2 billion in 2018.