By LEE C. CHIPONGIAN
The country’s gross international reserves or dollar stock is projected to hit its highest at $18.3 billion by end-December.
This is 7.6 percent higher than original target of $17 billion in 2005 and more than 14 percent higher compared to 2004’s $16 billion. As of November the central bank reported that GIR stood at $18.089 billion.
GIR in dollar equivalent, according to the Bangko Sentral ng Pilipinas (BSP), is the available foreign exchange resources of the country, which will be used to meet essential import requirements.
BSP sources said the $18.3 billion includes the bank’s gold reserves.
The dollar indicator also shows – on a monthly basis — how many months of importation the current GIR level can cover by computing the ratio of the dollar reserves to the average imports of goods and services for the next year.
In 2006 the BSP expects GIR of $18.65 billion but Governor Amando M. Tetangco Jr. said this could be higher, almost $21 billion if the strong inflows are sustained. The central bank said it would finalize 2006 forecasts soon, including balance of payments, remittances from migrant workers, portfolio and direct investments.
At the moment the BSP is still working out the numbers. The Monetary Board revises forecast or assumptions twice in a year.
The country’s dollar reserves continue to swell due to the large and continued inflows of remittances from overseas Filipino workers, which are expected to reach $10.3 billion this year. Including non-formal channels, OFW cash will actually total almost $14 billion for the year.
In the meantime the current GIR level, which was marginally lower by 0.05 percent compared to $18.098 billion a month ago, was adequate to cover about four months of imports of goods and payments of services and income.
The BSP said GIR was also equivalent to three times the country’s shortterm debt based on original maturity and 1.6 times based on residual maturity.
Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.
Tetangco said the month-on-month decline in the GIR level was attributed mainly to the payments of maturing foreign exchange obligations of the National Government and the BSP.
The outflows, however, were partly offset by proceeds from the $500 million term loan facility and floating rate notes availed of by the BSP last month, as well as its income from investments abroad.
