MANILA, November 8, 2005
 (STAR) By Rocel C. Felix - The country’s gross international reserves (GIR) went down by 2.5 percent to $18.086 billion in October from $18.542 billion in September as the National Government and the Bangko Sentral ng Pilipinas settled maturing obligations.

While the October figure was lower than the previous month’s level of $18.542 billion, it exceeded the end-2005 target of $17 billion.

For October, total maturing loans of the National Government amounted to $1.758 billion with a principal of $1.586 billion and interests of $171 million.

On the other hand, the BSP’s maturing loans on November 14 totaled $800 million. The BSP resumed its borrowing last October with $500 million while the rest of maturing obligations or $300 million will be retired using GIR.

"As expected the decline in the GIR level was attributed mainly to the payments of maturing foreign exchange obligations of the NG and the central bank. The outflows however, were partly offset by the BSP’s foreign exchange operations and income from investments abroad," BSP Governor Amando M. Tetangco Jr said.

Tetangco said that net international reserves as of end October inclusive of revaluation of reserve assets and reserve-related liabilities dropped to $17.249 billion from $17.704 billion in September.

The GIR level was adequate to cover four months of imports of goods and payments of services and income. This level was also equivalent to three times the country’s short-term debt based on residual maturity, the BSP said.

Short-term debt based on residual maturity refers to outstanding short-term external debt on original maturity plus principal payments on medium and long-term loans of the public and private sectors falling due within the next 12 months.

Previously, Tetangco said the country’s dollar reserves by end December will reach $18 billion which is higher than the projected $16 billion -$17 billion for the year.

GIR is the available foreign exchange resources of the country, which will be used to meet essential import requirements.

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.

The GIR is also the country’s total foreign currency holdings in the International Monetary Fund (IMF).

The international reserves comprise the total foreign currency holdings of the BSP, including gold and IMF special drawing rights.

Based on the BSP Treasury department, the Philippine reserve position in the IMF as of September is $126.55 million and gold reserves of $2.462 billion.

Chief News Editor: Sol Jose Vanzi

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