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Yearend GIR stands at $83.75B; BSP cites strong external accounts

The country’s gross international reserves (GIR) closed 2013 at $83.75 billion, lower than the Bangko Sentral ng Pilipinas’ (BSP) original GIR forecast of $87 billion for the full year.

The end-2013 foreign exchange reserves total is also a bit lower compared to end-2012’s $83.831 billion. In December, the BSP revised its 2013 GIR forecast from $87 billion to $85 billion.

BSP Governor Amando M. Tetangco Jr. in a speech before the Tuesday Club yesterday, said the Philippines continues to prove resilient against strong exernal headwinds, partly because of the healthy external accounts position. As of end-November, the balance of payments for one has remained in surplus at $4.7 billion.

The GIR continued to be sufficient, Tetangco said, and is adequate to cover 12 months’ worth of imports of goods and payments of services and income. The GIR is also equivalent to 8.4 times the country’s short-term external debt based on original maturity and 5.8 times based on residual maturity.

“Contributing to the increase in reserves were the foreign exchange operations and income from investments abroad of the BSP as well as foreign currency deposits by the Treasurer of the Philippines,” the BSP said in a statement yesterday. “These inflows were partially offset by revaluation adjustments on the BSP’s gold holdings and payments by the National Government for its maturing foreign exchange obligations.”

On the whole, Tetangco remains confident that the country’s solid macroeconomic fundamentals and stable financial system will help keep it “sufficiently strong to buck the general weakness of the global economy.”

For 2014, the BSP projects GIR will be higher and is expected to peak at $88 billion, at least.

The BOP surplus, in the meantime, is forecast to hit $3 billion this year from an expected $5.3 billion in 2013 while current account surplus which is part of the BOP, will likely close 2013 at $11.1 billion and $10.4 billion this year.

At end-December, the BSP also reported foreign investments of $72.714 billion from $70.728 billion in 2012, and gold reserves of $7.492 billion, lower compared to the precious metal’s hoard of $10.352 billion the previous year. It was the decline in gold prices, among other factors, that dragged GIR lower for 2013.