Debt payments slash forex reserves to $80 billion

Payments by the national government of its maturing foreign debt along with the Bangko Sentral ng Pilipinas’ (BSP) foreign-exchange (forex) operations resulted in the drop of foreign reserves in January. 

Data released by the Bangko Sentral ng Pilipinas (BSP) Friday showed that gross international reserves (GIR) in the first months of the year totaled $80.16 billion, down from the previous month’s $80.67 billion and year-ago’s $80.72 billion.

The government’s GIR projection for this year is $82.7 billion.

Amidst the slight decline of the central bank’s foreign reserves, Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said the GIR was still enough to cover 10.2 months worth of imports of goods and services and income.

The amount was also equivalent to 5.5 times the country’s short-term external debt based on original maturity and four times based on residual maturity, which the central bank defines as the “outstanding external debt with original maturity of one year or less plus principal payments of medium and long-term loans of the public and private sectors falling due within the next 12 months.

Tetangco said the drop in GIR was countered by inflows from the national government’s net foreign currency deposits, income of the central bank’s investments abroad, and revaluation adjustments of the BSP’s gold holdings on back of increase in the price of this commodity in the international market.

During the same period, the central bank’s net international reserves (NIR), which is the difference between the GIR and total short-term liabilities, also stood went down to $80.16 billion from the previous month’s $80.66 billion. PNA