GIR hits 3-yr high on bonds, BSP investments

GIR hits 3 yr high on bonds BSP investments
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THE government’s global bond issuance and income from the Bangko Sentral ng Pilipinas (BSP) investments abroad boosted the country’s Gross International Reserves (GIR) to the highest level in three years.

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The BSP preliminary data showed the country’s GIR level rose to $104.48 billion as of end-May from $102.65 billion as of end-April 2024. This was the highest since the $108.79 billion posted at the end of 2021.

BSP data showed the GIR level at the end of May 2023 was at $100.59 billion.

“The month-on-month increase in the GIR level reflected mainly the National Government’s [NG] net foreign currency deposits with the Bangko Sentral ng Pilipinas [BSP], which include proceeds from its issuance of ROP Global Bonds, and net income from the BSP’s investments abroad,” the BSP explained.

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The latest GIR level represents a more than adequate external liquidity buffer equivalent to 7.7 months’ worth of imports of goods and payments of services and primary income.

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The BSP deems the GIR level adequate if it can finance at least three-months’ worth of the country’s imports of goods and payments of services and primary income.

The data also showed that the GIR was about 5.9 times the country’s short-term external debt based on original maturity and 3.6 times based on residual maturity.

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According to the BSP, short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less.

This is on top of principal payments in the medium- and long-term loans of the public and private sectors falling due within the next 12 months.

“The level of GIR, as of a particular period, is considered adequate, 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,” BSP added.

The BSP also said the country’s net international reserves increased by $1.87 billion to $104.46 billion as of end-May 2024 from the end-April 2024 level of $102.59 billion.

The net reserves refer to the difference between the BSP’s reserve assets (GIR) and reserve liabilities.

Reserve liabilities are short-term foreign debt and credit and loans from the International Monetary Fund (IMF).





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