PH dollar reserves hit 2-mo high

THE country’s gross international reserves ( GIR) climbed to a twomonth high of $ 85.70 billion in October on the back of the government’s foreign currency deposits and the central bank’s investment income.

The figure — the largest since August’s $ 86.03 billion — was also 0.14 percent and 14.7 percent higher than the revised figure posted in September and the actual reserves a year ago, respectively, preliminary data released by the Bangko Sentral ng Pilipinas (BSP) on Thursday showed.

In a statement, the central bank said the month-on-month increase “reflects the national government’s foreign currency deposits and BSP’s income from its investments abroad.”

These were partially tempered by payments made by the government for servicing its foreign exchange obligations.

Asked what does higher dollar reserves mean for ordinary Filipinos, Union Bank of the Philippines chief economist Ruben Carlo Asuncion told TheManilaTimes that it could boost people’s consumption capacity.

“For ordinary people, the more stable the exchange rate is, the better it is for capacity to buy and spend,” he said.

Asuncion explained that higher

GIR gives the central bank greater leeway/ space in managing its exchange rate.

“Exchange rates are important in trade and the external position of an economy. If it is at a healthy level, then, it is good for everyone within and outside that said economy,” he added.

The latest reserve level was enough to cover 7.5 months worth of imports, higher than September’s 7.4 months and the 6.5 months a year earlier, respectively.

It was also equivalent to 5.5 times the country’s short- term external obligations due within one year and 4.1 times based on residual maturity.

Net international reserves, which refer to the difference between GIR and total short-term liabilities, increased to

$85.69 billion from $85.57 billion a month earlier.

GIR are foreign assets that are readily available to and controlled by the BSP for direct financing of payment imbalances, and for managing the magnitude of such imbalances. It consists of holdings of gold, special drawing rights, foreign investments, and foreign exchange, including reserve position in the fund.