ASEAN KEY DESTINATIONS
Philippines foreign reserves may drop
"Definitely, it's not going to be as high as what we saw in 2010, but I think 2011 continues to be a strong year," BSP Deputy Governor Diwa Guinigundo said. From the Philippines' perspective, Guinigundo said the slowdown in advanced economies will affect the country's external payments position.
"But if we go by our past experience notwithstanding the global financial crisis in 2007 up to 2009 we managed to show a very respectable if not a very impressive performance," he said.
The Philippines' gross international reserves (GIR) grew to a record $61.3 billion at end-November from $57.2 billion the previous month. Year-on-year, the end-November GIR level expanded by about 39 percent compared with the $44.16 billion.
The BSP holds international reserves for the foreign exchange requirements of the country in case the domestic commercial banks' supply of the greenback falls short of demand.
The foreign assets that the BSP held are mostly in the form of investments in foreign-issued securities, monetary gold and foreign exchange. An ample GIR level helps prop up the peso and keeps domestic inflation at bay.
The country's balance of payments (BOP) also recorded an all-time high of $13.2 billion at end-November on account of the continued strength in Philippines exports and remittances from overseas Filipino workers, revenues from business process outsourcing and tourism receipts.
The policy making Monetary Board will meet on December 30, the last for this year, to revisit all the numbers after surpassing all projections set early this year.
"After coming up in October, we really need to review the numbers. We did not expect that the improvements would be this very significantly higher number," Guinigundo said, referring to the central bank's BOP and GIR projections.
The first adjustment in the GIR came about when the end-September level rose to $53.5 billion, breaching the then full-year target of $49 billion. The BSP then revised the forecast to $50 billion, only to be breached at end-October to $56.8 billion which forced monetary authorities to raise the forecast to $60 billion.
Similarly, the latest BOP surplus is $5 billion higher than the revised $8.2 billion full-year projection for the year.
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