GIR balloons to 3-month high at end-April to $107B

BOND issuances by the national government and higher gold prices increased the country’s gross international reserves (GIR) to a three-month high of $107.25 billion as of the end of April.

Preliminary Bangko Sentral ng Pilipinas (BSP) data showed on Friday the figure was 2.3 percent and 17.93 percent higher than the $104.48 billion and $90.94 billion at end-March and a year earlier, respectively.

End-April’s amount was the biggest foreign reserves level since the $108.67 billion at end-January this year.

“The month-on-month increase in the GIR level reflected inflows that were mainly from the proceeds of the national government’s ROP (Republic of the Philippines) global and samurai bonds issuances, which were deposited with the BSP,” the central bank said.

It can be noted that the national government has raised $2.75 billion (about P132.13 billion) from a double-tranche offering of US dollar-denominated bonds last December. It also secured 55 billion yen ($500-million or about P24.23-billion) worth of “samurai” bonds last March.

“Further, an upward adjustment in the value of the BSP’s gold holdings due to the increase in the price of gold in the international [market] contributed to the higher GIR level,” the BSP added.

Outflows from the national government’s foreign currency debt servicing, on the other hand, partially offset these inflows.

The Bangko Sentral said the latest dollar-reserves amount “represents a more than adequate external liquidity buffer, which can help cushion the domestic economy against external shocks.”

It is also enough to cover 12.3 months worth of imports, wider than the 12 months and 8.5 months buffer at end-March and a year ago level, respectively; 7.5 times the country’s short-term external debt based on original maturity; and 5.2 times based on residual maturity.

Net international reserves, which refer to the difference between GIR and total shortterm liabilities, also went up to $107.24 billion as of end-April from $104.47 billion a month ago.

The central bank forecasts these reserves to pick up to $106 billion this year. This is equivalent to 10.9 months of import cover, with the support coming from current and financial account inflows.

But central bank Gov. Benjamin Diokno sees these reserves to even surge to $120 billion by the end of the year.