FOREIGN RESERVES RISE TO RECORD $18.59 IN SEPTEMBER
MANILA, October 8, 2005 (STAR) By Donnabelle L. Gatdula - The country’s foreign-exchange reserves rose to a record level in September as the government sold debt abroad to plug this year’s budget deficit, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.
The gross international reserves (GIR) rose by 3.6 percent to $18.59 billion in September from a revised $17.94 billion in August, the BSP said.
The BSP’s income from its foreign-exchange operations and earnings from its investments overseas also helped boost the reserves, BSP Governor Amando Tetangco Jr. said.
The reserves, which are in dollars, yen and gold, are enough to pay for about four months worth of imports of goods and services.
This level was also equivalent to 3.1 times the country’s short-term debt based on original maturity and 1.7 times based on residual maturity.
Short-term debt based on residual maturity pertains 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.
The government last month sold $1 billion of global bonds, bringing total debt sales this year to $3.2 billion. The Philippines is selling debt because its revenue is not enough to fund spending.
Net international reserves, inclusive of revaluation of reserve assets and reserve-related liabilities, reflected a four-percent increase to $17.763 billion from $17.085 billion the previous month.
The country’s GIR figures from 1994 to 2004 were revised to reflect the reclassification of released collateral on Brady Bonds from non-international reserves to IR-eligible assets of the BSP.
This is in line with the treatment of foreign investments under RA 7651 (New Central Bank Act), which allows investments in securities even for maturities over five years to be included as part of the GIR.
The BSP is confident that it could surpass its GIR projection this year despite the prevailing political jitters.
But a BSP official pointed out that surpassing the $16-billion to $17-billion GIR target for this year still hinges on the capability of the market to discount all the existing political controversies hounding the Arroyo administration.
"If market confidence improves, there would be a good likelihood that we can surpass our (GIR) projection," the official said.
Chief News Editor: Sol Jose Vanzi
© Copyright, 2005
by PHILIPPINE HEADLINE NEWS ONLINE
All rights reserved
PHILIPPINE HEADLINE NEWS ONLINE [PHNO] WEBSITE