PHL April forex reserves expand to record $67.8B

(Updated 6:12 p.m.) The country's foreign exchange reserves expanded 44.4 percent to a record $67.78 billion as of end-April, helped by central bank's earnings from investments abroad and revaluation gains of its gold holdings, the Bangko Sentral ng Pilipinas (BSP) said Friday. The revaluation gains were driven by surging gold prices in the world market, the BSP said. The end-April gross international reserves (GIR) level was $20.84 billion more than the $46.94 billion recorded a year earlier, $1.8 billion more than the end-March level of $65.98 billion, the Bangko Sentral said in a statement, citing BSP Governor Amando Tetangco Jr. The GIR is the sum of all foreign exchange flowing into the country. BSP data showed that the central bank's income from investments abroad surged 49.4 percent to $58.36 billion from $39.06 billion year-on-year and 2.4 percent from $57 billion month-on month. The central bank's gold holdings went up by 20.4 percent to $7.59 billion in April from $6.31 billion year-on-year and 7.3 percent $7.08 billion month-on-month. However, the central bank said its income from foreign exchange operations dropped 15 percent to $294.11 million in April from $346.18 million a year earlier. It declined 24 percent from $385.42 million at the end of March. $2.22B off the 2011 forecast The country is just $2.22 billion dollars away from the forecast GIR record of $70 billion for the year, according to BSP data. With eight months still left in 2011, the reserves already grew by $4.24 billion in the past four months. Meanwhile, the BSP expects the country to post a balance of payments (BOP) surplus of $6.7 billion this year and $4.4 billion next year. The BOP is the difference between foreign exchange inflows and outflows and sums up the country’s transactions with the rest of the world. Last year, the BOP record surplus was $14.4 billion on the strength of strong overseas Filipino workers' (OFW) remittances, high earnings of the business process outsourcing sector, sustained export growth and surging foreign investment. But for 2011, the policy-setting Monetary Board scaled down its growth forecast for OFW remittances to 7 percent or $20.1 billion, down from 8 percent or $20.2 billion this year and further to 5 percent or $21.1 billion next year. The BSP said political tensions in the Middle East and North Africa and the March 11 earthquake and tsunami tin Japan will impact the country’s BOP. The Philippines recently got ratings upgrades from Moody's Investors Service as well as Standard and Poors (S&P) due to the country's strong external payments position. Moody's has yet to raise the country's credit rating, which is at three notches below investment grade on a positive outlook. S&P and Fitch Ratings assess Philippine debt at two notches below investment grade with a stable outlook. — ELR/VS, GMA News