PHL 2011 foex reserves likely to reach $78.4B

The country's gross international reserves, or foreign exchange holdings, will likely reach $78.4 billion this year, the International Monetary Fund said Wednesday. The multilateral lender's forecast signifies that capital funds from developed economies will continue to benefit emerging market economies, including the Philippines. Bangko Sentral ng Pilipinas Gov. Amando Tetangco Jr. had projected that foreign exchange reserves were to end 2011 between $68 billion and $70 billion. The country's GIR widened by 40 percent to $62.1 billion as of December last year from $44.24 billion booked in the same period in 2009, according to central bank data. Managing capital inflows The IMF said the Philippines needs "an appropriate mix of policy tools to manage capital inflows while facilitating productive use of these inflows." "Exchange rate, for instance, should adjust to market pressures... With the exchange rate broadly in line with fundamentals, greater exchange rate flexibility could be considered in response to additional inflows," the fund said in its Public Information Notice on the Philippines. It also took note of Philippine monetary authorities' intention to further liberalize foreign exchange regulations and avoid capital controls. — JE/VS, GMA News