The Bangko Sentral ng Pilipinas (Philippine Central Bank) holds US$ 71 billion in gross international reserves (GIR) as of July 2011. This represents a growth of $2 billion from $69 billion in GIR reported as of the end of June, and compares with only $49 billion in GIR for the same period last year.
The central bank explained the increase as resulting from foreign exchange operations, income from investments abroad, and gains on the revaluation of the bank’s gold holdings. The central bank holds $7.7 billion in gold. The GIR numbers reflect offsets for payments by the national government for its maturing foreign exchange obligations.
The country’s GIR currently equal 10.6 months worth of imports and payments for services. Put another way, the Philippines’ GIR equal 10.5 times the country’s short-term external debt based on original maturity and 6.1 times based on remaining maturity.
Increasing Philippine GIR reflects strength in exports, remittances from overseas workers, and other capital inflows such as foreign portfolio investments. These inflows have prompted the central bank to buy dollars in an effort to stabilize the Philippine Peso and prevent appreciation that might cut into the country’s competitiveness in exports.
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