MANILA: The country’s gross international reserves (GIR) dropped last November due to foreign exchange losses and the lower global market price of gold, according to the Bangko Sentral ng Pilipinas (BSP).
BSP preliminary data released on Wednesday, December 7, showed that the country’s reserves settled at $82.73 billion as of end-November, a drop of $2.38 billion compared to the end-October 2016 GIR of $85.11 billion. November’s figure is also the lowest seen this year since February, and continues a downward trend since reaching $85.79 billion in August.
But the BSP noted that November’s level is $2.06 billion higher compared to the end-December 2015 level of $80.67 billion.
“The decline from October to November was due mainly to outflows arising from the foreign exchange operations of the BSP, revaluation adjustments on the BSP’s gold holdings resulting from the decrease in the price of gold in the international market, and payments made by national government for its maturing foreign exchange obligations,” BSP Governor Amando Tetangco Jr said in a statement.
These losses, Tetangco added, were partially offset by the government’s net foreign currency deposits along with the BSP’s income from investments abroad.
BSP data showed that the value of the government’s gold holdings dropped to $7.4 billion in November compared to $8.1 billion in October.
At the same time, the peso also dropped to a near 8-year low against the dollar in November as the greenback surged, and expectations of a US Federal Reserve rate hike were heightened.
The BSP said November’s reserve level can cover 9.6 months’ worth of imports of goods and payments of services and income. It is also equivalent to 5.9 times the country’s short-term external debt based on original maturity and 4.2 times based on residual maturity.
