PNoy tells BSP to reduce dollar reserves, diversify currency holdings

President Benigno Aquino III said the country ought to diversify its mix of international reserves to protect the country from the shocks the dollar may absorb in the aftermath of the United States debt crisis. “There is an old saying, don’t put all of your eggs in one basket," Aquino said. Aquino’s Finance Secretary, Cesar Purisima is the Cabinet representative in the policymaking Monetary Board of the Bangko Sentral ng Pilipinas (BSP). The 1987 Constitution mandates that the BSP function as an "independent central monetary authority." According to the BSP, a breakdown of the country’s foreign currency reserves (excluding gold) as of end-March showed that 75.9 percent were in US dollars, with 13.4 percent in Japanese yen, 4.8 percent in euros, and 10.73 percent in gold. The gross international reserves as of end-July stood at a record $71 billion. About 11 percent or $7.7 billion of that was in gold holdings and about 70 percent in US dollars. Aquino said profits can be made in the Philippines for investors looking for an alternative to the US market. “If it is profitable to do business here, it will remain to be profitable. And I think most of those who are serious investors as opposed to hot money will try to maximize returns everywhere else," Aquino said. — ELR/VS, GMA News