RP forex reserves climb to record $47-B in April

The country's foreign exchange reserves grew to a new record level of $47.03 billion in April on the back of proceeds from the first ever issuance of multi-currency retail treasury bonds for overseas Filipino workers (OFWs) as well as higher income of the Bangko Sentral ng Pilipinas (BSP) from its foreign exchange operations and investments abroad. BSP Governor Amando Tetangco Jr. said the country's gross international reserves (GIR) last month was $1.43 billion higher than the revised end-March level of $45.6 billion arising from post-audit adjustments in the special drawing rights (SDR) holdings of the central bank (it was initially reported at $46.2 billion). Tetangco attributed the growth of the country's GIR to higher national government deposits, foreign exchange operations and income from investments abroad of the BSP, and the higher value of the central bank's gold holdings. "The build-up in reserves stemmed primarily from foreign exchange inflows arising from deposits by the national government of proceeds from the domestic issuance of multicurrency RTBs for overseas Filipinos, foreign exchange operations of the BSP and income from its investments abroad as well as revaluation gains on BSP's gold holdings brought about by the continued increase in the price of gold in the international market," he said. The government successfully raised $500 million when it issued retail treasury bonds for OFWs comprising of $400 million and 75 million Euros last month. This brought the foreign commercial borrowing of the national government to about $3.1 billion so far this year consisting of $1.5 billion US dollar-denominated bonds, the $1.1 billion Samurai bonds, and the $500 million multicurrency retail treasury bonds. Data showed that the BSP's foreign investments went up by 3.2 percent to $39.119 billion in April from the revised figure of $37.891 billion in March while income from its foreign exchange operations plunged by 30.2 percent to $362.56 million from $519.31 million due to the continued appreciation of the peso against the US dollar. The central bank's gold holdings increased by 6.1 percent to $6.312 billion in April from $5.951 billion in March while special drawing rights (SDRs) from lender International Monetary Fund (IMF) was steady at $1.104 billion. According to Tetangco, the inflows were partly offset by the payments of maturing foreign exchange obligations of the national government. Tetangco said the GIR - the sum of all foreign exchange flowing into the country - could cover 9.3 months of imports of goods and payments of services and income. The BSP chief added that the current GIR level was also equivalent to 11.8 times the country’s short-term external debt based on original maturity and 5.3 times based on residual maturity falling due in the next 12 months. The country's GIR jumped 17.8 percent to a new record high of $44.24 billion in 2009 from $37.55 billion in 2008 due to strong inflows, government deposits, and the increasing value of the central bank’s gold holdings. The government's macroeconomic targets including the GIR, balance of payments (BOP), overseas Filipino workers' (OFW) remittances, among others were revised upwards last month as global economic activity is expected to initially gain lost ground and develop stronger growth momentum. The country's GIR is expected to reach between $48 billion and $49 billion instead of the earlier projection of $47 billion to $48 billion this year while the BOP position which refers to the difference of foreign exchange inflows and outflows on a particular period and represents the country’s transactions with the rest of the world is seen posting a surplus of $3.7 billion instead of $3.2 billion . The BSP also now projects an eight percent rise in OFW remittances instead of six percent this year from a record $17.348 billion last year. The amount of money sent home by overseas Filipinos went up by 7.7 percent to $2.785 billion in the first two months of the year from $2.552 billion in the same period last year. The BSP sees foreign direct investment (FDI) inflows easing to about $1.8 billion this year after jumping by 26.2 percent to $1.95 billion last year from $1.54 billion in 2008 on the back of strong equity inflows as investors continued to plough back earnings to the country in recognition of the resilient domestic economy. The DBCC sees the country's domestic output as measured by the GDP expanding between 2.6 percent and 3.6 percent this year. The Philippines escaped recession as its GDP managed to expand by 0.9 percent from a 3.8 percent expansion in 2008. - GMANews.TV