The country’s foreign currency buffer, or the gross international reserves (GIR), improved in November to $75.49 billion.
Bangko Sentral ng Pilipinas (BSP) Governor Nestor Espenilla Jr. reported on it on Friday as the buffer recovered from a seven-year low in October when it stood at only $74.71 billion. The GIR is a measure of the country’s ability to service maturing foreign currency obligations or pay for such critical imports as oil, the rice and even dairy.
Preliminary data from BSP attributed the revitalized GIR to inflows arising from the Central Bank’s foreign exchange operations and income from its offshore investments.
“However, the increase in GIR level was partially tempered by the payments made by the national government for its foreign exchange obligations and its foreign currency withdrawals as well as the revaluation adjustments on the BSP’s gold holdings resulting from the decrease in the price of gold in the international market,” it said.
The foreign currency buffer was rated sufficient to cover 6.9 months of imports, a slight uptick from the equivalent of 6.8 months in October.
Moreover, the external liquidity buffer also translates to 5.8 times the country’s short-term external debt based on original maturity and 4.1 times based on residual maturity.
The gold holdings of the BSP in November also showed a decline to $7.77 billion from $7.85 billion a month earlier.
Meanwhile, the net international reserves, or the difference between the BSP’s GIR and total short-term liabilities, likewise grew by $0.78 billion to $75.47 billion as of November from October 2018 level of $74.69 billion.
The GIR were highest from 2011 to 2013 when these were considered sufficient to cover 11.6 months of imports, according to BSP data.
The GIR fell from as high as $81.22 billion in January as consequence of the ongoing effort to fortify the country’s ability to post growth for the long haul by building critical infrastructure as ports, roads, bridges and airports.
A good part of the ongoing buildup also partakes of the nature of capital goods purchases that should also ensure long-haul growth.