THE country’s dollar defenses grew in October this year, making up for the slight dip it incurred in the previous month.
On Friday, the Bangko Sentral ng Pilipinas (BSP) reported that the country’s gross international reserves (GIR) hit $107.95 billion in end-October this year. This is a recovery from the dip in September to $106.6 billion.
It is also higher than the $103.8-billion GIR level of the country in October last year.
The country’s GIR is the level of foreign exchange holdings managed by the Central Bank during a given period. The GIR is a crucial component of the economy as it is often used to manage the country’s foreign exchange rate against excess volatility.
The BSP said the current level of the country’s GIR represents a “more than adequate” external liquidity buffer equivalent to 10.8 months’ worth of imports of goods and payments of services and primary income.
It is also about 7.8 times the country’s short-term external debt based on original maturity and 5.4 times based on residual maturity.
In a news statement, the Central Bank attributed the increase in the GIR level to the national government’s (NG) net foreign currency deposits with the BSP and upward adjustment in the value of the BSP’s gold holdings due to the increase in the price of gold in the international market.
Data showed that the country’s gold holdings hit $9.13 billion in October, up from the $8.85 billion in the previous month.
Earlier this year, BSP Governor Benjamin Diokno said the country’s strong external position—particularly the country’s strong GIR position—allows the country to manage the impact of shocks, including market reaction over a pending move of the US Federal Reserve to normalize its monetary policy.