GROSS INT'L RESERVE (GIR) SEEN AT RECORD LEVEL OF $24 BILLION IN '07
MANILA, NOVEMBER 29, 2006 (STAR) By Des Ferriols - The country’s gross international reserve (GIR) is expected to hit a record level of $24 billion in 2007, boosted largely by strong dollar inflows from foreign investments and remittances from overseas Filipino workers (OFWs).
The Bangko Sentral ng Pilipinas (BSP) is reviewing the macro-economic projections for 2007 and the peso-dollar exchange rate has already been upgraded to 50 to 52 due to the consistent strength of the peso against the dollar this year.
BSP Governor Amando M. Tetangco Jr. said the projected GIR level for 2007 would be $2 billion more than the $22-billion target for the whole of 2006.
In 2007, remittances from overseas Filipino workers (OFWs) are expected to reach a record-high of $14 billion, higher than the $13.4 billion target for 2006.
The BSP said OFW remittances in 2006 alone already showed significant improvement in terms of how much funds are now being sent through the banking system.
BSP Deputy Governor Diwa Guinigundo said the central bank expects banks to account for 90 percent of OFW remittances as costs went down and bank services became more accessible for workers abroad.
By 2007, Guinigundo said they expect that this proportion could go up further to 95 percent of total remittances.
With OFW remittances hitting record levels, BSP officials said the 2007 GIR projection was reasonable when projected investments were also considered.
Because overall foreign exchange inflows have been stronger than expected, the BSP has already upgraded its projected balance of payments (BOP) surplus for 2006 from $2 billion to $2.8 billion.
The BSP said remittances from OFWs are increasing faster than originally expected and the projected growth rate had been revised from 11 percent to 15 percent.
The BSP said strong OFW inflows as well as export earnings boosted the inflows into the country’s current and financial account as well as current account.
The BSP also revised its foreign direct and portfolio investments projection for 2006 to $2 billion and $3.6 billion, respectively based
on renewed investor confidence that have so far translated into faster increase in inflows.
Chief News Editor: Sol Jose Vanzi
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