Forex reserves hit $79.9-B in May

ABS-CBN News

Posted at Jun 06 2014 05:39 PM | Updated as of Jun 07 2014 01:39 AM

MANILA, Philippines – The country's gross international reserves (GIR) reached $79.96 billion in May, the highest in three months, the Bangko Sentral ng Pilipinas (BSP) said Friday.

The May GIR level was slightly up from the $79.84 billion seen in April.

The central bank attributed the increase in reserves to the foreign exchange operations of the BSP and the net foreign currency deposits by the Treasurer of the Philippines.

“These inflows were partially offset by the revaluation adjustments on the BSP’s gold holdings and payments for maturing foreign exchange obligations of the national government,” the BSP said.

Foreign exchange reserves in May are enough to cover 11.1 months’ worth of imports, well above the three months’ worth of imports traditionally accepted as an adequate level of reserves.

International reserves reflect a country’s ability to pay for its foreign debt and its imports of goods and services.

Cash remittances, which help power domestic consumption and boost the country's foreign reserves, grew 6.5 percent in March from a year earlier, bringing total remittances in the first three months of the year to $5.5 billion, or 6 percent higher than a year ago.

BSP forecasts record gross international reserves of $88 billion by end of this year, from $83.2 billion at end-2013.

BSP Governor Amando Tetangco, Jr., however, said in December that the actual 2014 level may only reach between $86 billion and $87 billion due to revaluation adjustments.

The central bank also expects the country to end the year with a balance of payments surplus of $3 billion, or 0.9 percent of gross domestic product, narrower than the previous year's $5.1 billion surplus.

The central bank kept the benchmark rate steady at a record low 3.5 percent on May 8 but raised banks' reserve requirements for the second time in as many meetings on concerns that persistently high liquidity could stoke inflation. Its next monetary policy review is June 19. -- With Reuters