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Dollar reserves hit $107.95B 

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The country’s dollar reserves continue to remain strong as of end-October, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

Settling at $107.95 billion, the latest gross international reserves (GIR) figure is $1.35 billion higher than the recorded $106.6 billion as of end-September 2021.

“The month-on-month increase in the GIR level reflected mainly the national government’s (NG) net foreign currency deposits with the BSP,” the BSP explained.

The NG earlier issued its maiden retail dollar bond or RDB–the proceeds of which, amounting to $1.59 billion were deposited to the BSP.

The central bank likewise attributed the better GIR data to the upward adjustment in the value of the BSP’s gold holdings due to the increase in the price of gold in the international market.

“The latest GIR level represents a more than adequate external liquidity buffer equivalent to 10.8 months’ worth of imports of goods and payments of services and primary income,” it said.

“Moreover, it is also about 7.8 times the country’s short-term external debt based on original maturity and 5.4 times based on residual maturity,” it added.

According to the BSP, a country’s GIR is viewed to be adequate if it can finance at least three-months’ worth of its imports of goods and payments of services and primary income.

Michael Ricafort, chief economist at the Rizal Commercial Banking Corp. said the country’s dollar reserves may continue to grow in the coming months, to be sustained by remittances from overseas Filipino workers (OFW) and foreign direct investments or FDI, among others.

“For the coming months, GIR could still post new record highs amid continued growth in the country’s structural US dollar inflows…However, (an) offsetting risk factor is the wider trade deficit as imports picked up as the economy reopens further,” Ricafort explained.

The BSP earlier downscaled its GIR projection for the year, casting a $114 billion view from the previous $115 billion outlook.

 

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