Based on the preliminary data of the Bangko Sentral ng Pilipinas (BSP), the American Dollar reserves of the Philippines reached $111.981 billion (as of September 2024 specifically) which counts as a new all-time high, according to a Manila Bulletin business news report.
To put things in perspective, posted below is an excerpt from Manila Bulletin report. Some parts in boldface…
The country’s US dollar stock climbed to its highest level of $111.981 billion as of end-September 2024, surpassing the previous record of $108.794 billion in 2021, as the central bank was accumulating foreign exchange and assets to boost external reserves and defend the local currency.
Based on preliminary data released by the Bangko Sentral ng Pilipinas (BSP) on Monday, Oct. 7, the gross international reserves (GIR) increased by 14.13 percent or by $13.865 billion year-on-year compared to $98.116 billion same time in 2023.
The GIR also rose by 3.82 percent or by $4.125 billion versus end-August this year’s reserves of $107.857 billion.
The BSP-monitored GIR are foreign assets of the BSP invested in foreign-issued securities, monetary gold, and foreign exchange.
The latest GIR level is “more than adequate external liquidity buffer” that is equivalent to 8.1 months’ worth of imports of goods and payments of services and primary income. It is also about 6.3 times the country’s short-term external debt based on original maturity and 4.4 times based on residual maturity, said the BSP.
Basically, a GIR is adequate if it can finance at least three-months’ worth of the country’s imports of goods and payments of services and primary income. This was based on international standards. The GIR is also viewed as more than sufficient if it provides at least 100 percent cover for the payment of the country’s foreign liabilities, public and private, falling due within the immediate 12-month period.
The reserves were higher in end-September because of the government’s net foreign currency deposits with the BSP that includes proceeds from the issuance of ROP Global Bonds.
The GIR likewise got a boost from the BSP’s gold holdings which had a higher value with the increase in the prices of gold in the global market. The BSP’s net income also increased due to its investments overseas.
Let me end this post by asking you readers: What is your reaction to this recent development? What is the first thing that comes to your mind when the Philippines’ US Dollar reserves grow? Does this development make you feel comfortable when it comes to banking, investing or running a local business? Are you satisfied with the way the BSP has been moving with regards to financial and economy activities?
You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.
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