Daily TribuneForeign investments mostly contributed to the GIR growth as they reached $91.4 billion from $91.1 billion
Isabela catches Paleng-QR fever Cabagan, Isabela Mayor Christopher Mamauag (left) and Bangko Sentral ng Pilipinas Tuguegarao branch area director Eva Lynne Marcos buy Cabagan products using QR Ph as they lead the launch of Paleng-QR Ph Plus in Cabagan Convention Center on 19 August.
Photograph courtesy of BSP
The country’s gross international reserves (GIR) slightly rose to $106.9 billion as of August from $106.7 billion as of July as foreign investments grew while currency gains and gold prices declined.
The Bangko Sentral ng Pilipinas (BSP) said the latest GIR level remained more than enough as an external liquidity buffer covering 7.9 months’ worth of imported goods, payments of services and primary income.
GIR consists of foreign investments, gold, foreign exchange, reserve position in the International Monetary Fund, and special drawing rights which include non-US dollar currencies.
Foreign investments mostly contributed to the GIR growth as they reached $91.4 billion from $91.1 billion.
Gold stock declines
However, the country’s gold holdings declined to $10.2 billion from $10.3 billion. Similarly, gains from foreign exchange fell to $773 million from $809 million as peso started appreciating at P56 per dollar only last month.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said GIR could remain relatively high partly due to crude oil prices.
“There has been a narrowing trend of the country’s trade deficit in recent months, while global oil prices were still among two-year lows compared with other imported commodities in recent months that somewhat reduced the country’s import bill,” he said.
Meanwhile, HSBC Private Banking and Wealth chief investment officer for Southeast Asia James Cheo said the Philippines has maintained a healthy economic outlook for the rest of the year which can attract more foreign investments.
“We find promising and diverse opportunities from Asia’s corporate governance reforms and supply chain revamp, the rise of the Southeast Asian region and high-quality bonds,” he said.
Ricafort added investors will likely continue to invest in bonds in the second half of the year before central banks further cut their policy rates.
After easing its policy rate to 6.25 percent last month, BSP Governor Eli Remolona Jr. said another cut of 25 basis points is possible due to declining prices of goods and services.
“The US Federal Reserve is expected to start three series of rate cuts from 2024 to 2026 that could be matched locally,” Ricafort said.
