PHILIPPINE DAILY INQUIRER - January 8, 2010

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GIR hit all time high of $45.03B in 2009

THE country's Gross International Reserves (GIR) surged to an all time high of $45.03 billion in 2009, partly lifted by sustained growth in remittances and income from investments offshore.

At the end of 2008, GIR stood at $37.55 billion.

The BSP said in a report released Thursday that the 2009 GIR was enough to cover 9.1 months worth of imports and 4.2 times its external debt maturing within a year.

“There has been a substantial accumulation of reserves. GIR rose to a record high,” said BSP Governor Amando Tetangco Jr. in a speech during Thursday’s meeting of the Rotary Club of Manila.

He also said the country performed relatively better than most of its neighbors, as shown by the record GIR.

Gross international reserves is an indicator of a country’s ability to engage in commercial transactions—such as import and pay debts in foreign currencies—with the rest of the world. It is the total amount of foreign currencies managed by the BSP.

Foreign exchange inflows in the form of remittances, export income, revenue from investments in foreign instruments, as well as borrowings denominated in currencies other than the peso, help boost the GIR.

Remittances for 2009 were estimated to have reached over $17 billion, up by at least 4 percent from $16.4 billion the previous year.

Remittances continued to grow last year despite the global economic crisis.

The BSP said the GIR also saw a rise in income from its foreign exchange operations and foreign investments.

Borrowings made by the government and state-owned Power Sector Assets and Liabilities Management Corp. were also credited for the rise in GIR.

“Also contributing to the higher year-end GIR level were allocations of Special Drawing Rights (SDR), which were made available by the International Monetary Fund to its member countries,” the central bank said in the statement.

SDR, whose value is based on the values of selected currencies, is the currency used by the IMF.

The IMF gave its member-countries SDR allocations last year to help them cope with the ill effects of the global economic turmoil. The Philippines got $1 billion from the IMF.

Tetangco said the latest GIR indicated that the country’s external liquidity position was healthy. He said the Philippines need not borrow as much—as some countries had—just to boost its GIR.