RP's forex reserves climb to new record in 2009

The country’s gross international reserves (GIR) rose to a record $45 billion at the end of last year mainly due to higher dollar inflows, foreign borrowings of the National Government and increasing value of the central bank's gold holdings. The year-end level was $800 million higher than the end-November level of $44.2 billion, and by $7.4 billion more than the end-2008 level of $37.6 billion, the Bangko Sentral ng Pilipinas (BSP) said in a statement of Thursday. International reserves are an acceptable form of payment between central banks of different countries. The reserves themselves can either be gold or a specific currency, such as the dollar or euro. The central bank said the increase was brought about by inflows from the net foreign exchange operations of the central bank and income from its investments abroad. Data showed that the central bank’s foreign investments had gone up by 16.6 percent to $37.394 billion in 2009 from a year earlier. The value of the central bank's gold holdings also rose by a quarter to $5.459 billion. International reserves also benefited from borrowings of the National Government and the state-run Power Sector Assets and Liabilities Management Corp. (PSALM). The state borrowed $3.25 billion abroad last year. It also availed itself of official development assistance (ODA) loans from lending agencies led by the World Bank, Asian Development Bank and the Japan Bank for International Cooperation. The BSP also traced the record reserve level to the allocations of special drawing rights (SDR) made available by the International Monetary Fund (IMF) to member-countries, including the Philippines, in August and September 2009 to boost reserves and provide liquidity to the global financial system. "These receipts were in turn offset by outflows arising mainly from payments of maturing foreign currency-denominated obligations of the National Government and BSP," the central bank said. The preliminary end-December 2009 reserve level could cover 9.1 months of imports and payments of services and income. This year, the BSP expects the county’s gross international reserves to hit a new record of $47-$48 billion on the back of the government’s strong external liquidity position. “We expect the external liquidity position of the government to further improve with the projected balance of payment surplus last year," central bank Governor Amando M. Tetangco, Jr. said. — GMANews.TV