RP int’l reserves may hit $55B in 2010

The country’s gross international reserves (GIR) could reach $55 billion this year on the back of sustained foreign exchange inflows, Bangko Sentral ng Pilipinas (BSP) Gov. Amando Tetangco Jr. said Thursday night. Tetangco said the country’s GIR could be $5 billion higher than the earlier forecast of $50 billion. This is the fourth time the BSP revised the projected GIR level of the country for 2010. The BSP originally expected the GIR to hit $48 billion but later raised it to $49 billion and then to $50 billion. The GIR is the sum of all foreign exchange flowing into the country. As of September, the GIR stood at $53.54 billion, up by 26 percent in the same period last year and 7.3 percent higher from August. Monetary authorities traced the GIR increase to the robust foreign exchange inflows from higher borrowings by the national government, overseas investments, and gold holdings. In 2009, the country’s GIR rose to $44.24 from $37.55 billion in 2008 due to strong inflows, government deposits, and the increasing value of the central bank’s gold holdings. Meanwhile, Tetangco said the BSP is set to implement its fourth phase of reforms in its foreign exchange regulatory framework within the next two weeks, liberalizing existing restrictions on capital outflows to address the strong inflows of capital into the Philippines. Monetary authorities are looking at raising the limit on foreign exchange that clients may buy from banks without documentation requirements. At present, the limit for non-commercial purposes is pegged at $30,000 and the limit for outward investments stands at $30 million per investor per year. “We will increase that," Tetangco told reporters. He said monetary authorities would continue to use an “enhanced toolkit" to deal with the ongoing surge in capital flowing into the Philippines from developed countries. The elements of the BSP’s “enhanced toolkit" would include the building of GIR, Tetangco said. -- VE/OMG, GMANews.TV