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May GIR at year’s highest of $80.73B

The Philippines registered its highest international reserves this year in May due to the foreign exchange operations of the central bank and the net foreign currency deposits by the national treasury.

Data from the Bangko Sentral ng Pilipinas (BSP) showed yesterday that the country’s gross international reserves (GIR) reached $80.73 billion in May, higher compared with $79.84 billion in the previous month.

The end-May GIR, however, is lower by 1.5 percent compared with $81.97 billion in the same period last year.

The GIR as of May remained ample as it can cover 11-months’ worth of imports of goods and payments of services and income.

The Philippines’ reserves are also equivalent to 7.7 times the country’s short-term external debt based on original maturity and 5.7 times based on residual maturity.

Net international reserves (NIR), which refer to the difference between the BSP’s GIR and total short-term liabilities, also increased to $80.7 billion as of end-June 2014, compared to the end-May 2014 NIR of $80.2 billion.

Earlier, the BSP said the GIR this year may be below the previously forecast amid the uncertainties in the global financial markets.

BSP Deputy Governor Diwa C. Guinigundo earlier explained given the uncertainty in the financial markets, the central bank has to be conservative with its targets.

“We’re still looking at the numbers given the new developments like, we’ve seen how capital flows have started coming back. We need to consider that in our projections,” Guinigundo told reporters.

He further said that the central bank is also meeting with industry stakeholders such as those from the business process outsourcing (BPO) and tourism sectors in order to validate the current estimates.

“We need to consider all that market information,” Guinigundo said.

The GIR reflects a country’s ability to pay for its foreign debt and its imports of goods and services.

The BSP has forecast the GIR level to reach $88 billion by year-end, six percent higher than the $83.187-billion figure in 2013. (Chino Leyco)