PHL Jan. forex reserves hit record $63.6B
GMANews.tv
02/07/2011
The country's gross international reserves (GIR) expanded to a record $63.61 billion in January on the back of higher government borrowings, robust foreign exchange operations, and higher income from overseas investments of the Bangko Sentral ng Pilipinas (BSP).
The GIR is the sum of all foreign exchange flowing into the country.
BSP Gov. Amando Tetangco Jr. said that last month's foreign exchange reserves was about 2 percent wider than the Dec. level of $62.371 billion and 39.5 percent more than the $45.591 billion booked in January last year.
“Foreign exchange inflows coming from the foreign currency deposits by the national government of proceeds from its peso-denominated global bonds issuance maturing in 2036, as well as the foreign exchange operations and income from investments abroad of the BSP, contributed to the appreciable increase in the reserves level," Tetangco stressed.
The national government early last month successfully raised about $1.25 billion from the sale of 25-year, peso-denominated global bonds due 2036. This is the second peso-denominated global bond sale of the Aquino administration, having successfully sold $1 billion in September last year.
Data showed that the BSP’s income from investments abroad zoomed 44.5 percent to $55.1 billion in January from $38.13 billion in the same month last year and 3.1 percent higher than the end-December level of $53.44 billion.
On the other hand, the value of the its gold holdings increased by 21.8 percent to $6.58 billion in January from a year-ago level of $5.4 billion but was 6.1 percent lower than the end-December level of $7.01 billion. Likewise, its income from foreign exchange operations plunged 44.2 percent to $443.78 million from $795.1 million.
Credit rating upgrade
Tetangco pointed out that the inflows were partially offset by payments for maturing foreign exchange obligations of the national government and revaluation losses on the BSP’s gold holdings given the decrease in the international market.
Furthermore, the BSP chief added that the end-January GIR could cover 10.5 months’ worth of imports of goods and payments of services and income as well as 11.1 times the country’s short-term external debt based on original maturity and 5.5 times based on residual maturity.
This year, the BSP sees the GIR hitting a new record level of $63 billion to $64 billion as foreign capital would continue to flood emerging market economies including the Philippines. Last year, the reserves surged 41 percent to a record $62.37 billion from $44.24 billion in 2009.
The BSP also sees the country's balance of payments (BOP) posting a surplus of about $2 billion this year from a record $14.4 billion in 2009 on the back of strong overseas Filipino workers’ (OFWs’) remittances, high earnings of the business process outsourcing sector, sustained export growth as well as surging capital flows.
The country's strong external payments position, he explained, helped the Philippines get a credit rating outlook upgrade from New York-based Moody’s Investors Service the other day as well as a credit rating upgrade from Standard and Poors last Nov. 12.
Moody's upgraded the country’s credit rating outlook to positive from stable while S&P raised the credit rating for the government’s long-term, foreign currency-denominated debt issuances by a notch, or from three to two notches below investment grade.
Moody’s, S&P, and London-based Fitch Ratings are closely watching the economic and fiscal developments in the Philippines.
However, Moody’s has yet to upgrade the country’s sovereign credit rating that is currently pegged at three notches below investment grade. S&P and Fitch, on the other hand, rate Philippine debt at two notches below investment grade with a stable outlook. – MRT, GMA News Online
The GIR is the sum of all foreign exchange flowing into the country.
BSP Gov. Amando Tetangco Jr. said that last month's foreign exchange reserves was about 2 percent wider than the Dec. level of $62.371 billion and 39.5 percent more than the $45.591 billion booked in January last year.
“Foreign exchange inflows coming from the foreign currency deposits by the national government of proceeds from its peso-denominated global bonds issuance maturing in 2036, as well as the foreign exchange operations and income from investments abroad of the BSP, contributed to the appreciable increase in the reserves level," Tetangco stressed.
The national government early last month successfully raised about $1.25 billion from the sale of 25-year, peso-denominated global bonds due 2036. This is the second peso-denominated global bond sale of the Aquino administration, having successfully sold $1 billion in September last year.
Data showed that the BSP’s income from investments abroad zoomed 44.5 percent to $55.1 billion in January from $38.13 billion in the same month last year and 3.1 percent higher than the end-December level of $53.44 billion.
On the other hand, the value of the its gold holdings increased by 21.8 percent to $6.58 billion in January from a year-ago level of $5.4 billion but was 6.1 percent lower than the end-December level of $7.01 billion. Likewise, its income from foreign exchange operations plunged 44.2 percent to $443.78 million from $795.1 million.
Credit rating upgrade
Tetangco pointed out that the inflows were partially offset by payments for maturing foreign exchange obligations of the national government and revaluation losses on the BSP’s gold holdings given the decrease in the international market.
Furthermore, the BSP chief added that the end-January GIR could cover 10.5 months’ worth of imports of goods and payments of services and income as well as 11.1 times the country’s short-term external debt based on original maturity and 5.5 times based on residual maturity.
This year, the BSP sees the GIR hitting a new record level of $63 billion to $64 billion as foreign capital would continue to flood emerging market economies including the Philippines. Last year, the reserves surged 41 percent to a record $62.37 billion from $44.24 billion in 2009.
The BSP also sees the country's balance of payments (BOP) posting a surplus of about $2 billion this year from a record $14.4 billion in 2009 on the back of strong overseas Filipino workers’ (OFWs’) remittances, high earnings of the business process outsourcing sector, sustained export growth as well as surging capital flows.
The country's strong external payments position, he explained, helped the Philippines get a credit rating outlook upgrade from New York-based Moody’s Investors Service the other day as well as a credit rating upgrade from Standard and Poors last Nov. 12.
Moody's upgraded the country’s credit rating outlook to positive from stable while S&P raised the credit rating for the government’s long-term, foreign currency-denominated debt issuances by a notch, or from three to two notches below investment grade.
Moody’s, S&P, and London-based Fitch Ratings are closely watching the economic and fiscal developments in the Philippines.
However, Moody’s has yet to upgrade the country’s sovereign credit rating that is currently pegged at three notches below investment grade. S&P and Fitch, on the other hand, rate Philippine debt at two notches below investment grade with a stable outlook. – MRT, GMA News Online
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