By Cai Ordinario, October 8 2019; Business Mirror

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THE country’s dollar reserves posted a new record high in September and again breached the $86-billion mark, according to preliminary data released by the Bangko Sentral ng Pilipinas (BSP) on Monday.

BSP data showed that the country’s gross international reserves (GIR) rose to $86.16 billion in September, $130 million higher than the $86.03 billion recorded in end-August.

“The increase in the GIR level month-on-month reflects the national government’s [NG] foreign-currency deposits and BSP’s income from its investments abroad,” BSP said.

“However, the increase in reserves was partially tempered by payments made by the NG for servicing its foreign-exchange obligations,” it added. The country’s GIR has been on an upward trend since November 2018, according to BSP data. The Philippines also started 2019 with a GIR level of $82.48 billion.

Preliminary data released by the BSP in July indicated that the country’s GIR was higher in June at $85.38 billion. The latest figures from the BSP showed that dollar reserves fell to $84.93 billion in June.

Rizal Commercial Banking Corp. economist Michael Ricafort said in July that he expects the country’s dollar defenses to increase further toward the end of the year and even post new record highs due to the following factors: the Philippines’s S&P upgrade to “BBB+,” possible continuation of net foreign portfolio investment inflows amid easing in inflation and local interest rates, continued growth in the country’s structural US dollar/foreign-currency inflows and proceeds from the government’s foreign bond issuances.

The September data showed the country’s GIR can still cover 7.5 months worth of imports. This is the highest level for the year and since March 2018 when the GIR could cover 7.6 months of the country’s imports.

BSP said this indicates the country has ample external liquidity buffer to cover imports of goods and payments of services and primary income.

It is also equivalent to 5.4 times the country’s short-term external debt based on original maturity and 3.9 times based on residual maturity. Net international reserves (NIR), which refers to the difference between the BSP’s GIR and total short-term liabilities, also increased by $130 million to $86.15 billion as of end-September 2019 from the end-August 2019 level of $86.02 billion.