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GIR rises to $80.95 billion in July

The Bangko Sentral ng Pilipinas (BSP) yesterday reported that end-July foreign currency-denominated reserves have reached $80.95 billion, up from the previous month’s $80.73 billion.

BSP Governor Amando M. Tetangco Jr. in a statement said the gross international reserves (GIR) “remains ample” at this level, about 11 months worth of the country’s imports of goods and payments of services and income. It also has 7.7 times equivalent to short-term external debt based on original maturity and 5.7 times on residual maturity.

The central bank data showed that end-July’s GIR is however lower compared to the same time in 2013 of $83.17 billion. Last year’s GIR eventually reached only $83.18 billion by end-December.

As of end-July, the country’s gold reserves amounted to $8 billion, lower than June’s $8.3 billion, while foreign investments increased to $70.29 billion from the previous month’s $69.88 billion.

The BSP stated that the slight increase in GIR was attributed to the net foreign currency deposits made by the Treasurer of the Philippines, part of proceeds from both project and program loans. Some of the contributions also came from its foreign exchange operations and income from foreign investments.

Last month the BSP reduced its external accounts projections for 2014 due to the volatile financial environment and higher trade gap from increased imports.

The central bank forecasts GIR will close 2014 at $85.3 billion, much lower than earlier projection of $88 billion.

It also reduced the balance of payments forecast from $3 billion surplus to $1.1 billion. The current account, which has sustained nine years of excess position, is expected to hit $6 billion compared to the previous estimate of $10.4 billion.

Tetangco reiterated that all significant external account numbers are expected to be lower than previously projected not only because of the current financial environment, but also mainly because of the Philippines’ higher import requirements for this year for reconstruction projects following the November 8 super-typhoon’s Yolanda’s wreckage of Eastern Visayas region.