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PHL foreign reserves hit $ 80.7B in June

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MANILA -- Strength of the Philippine economy continues to show in its foreign reserves, which rose to US$ 80.7 billion in June 2014.
Data released by the Bangko Sentral ng Pilipinas (BSP) on Monday showed that revaluation of the central bank’s gold holdings helped increase the country’s gross international reserves (GIR) from month-ago’s US$80.24 billion.
Price of gold in the international market was generally up last month surpassing other major asset classes partly on back of some traders’ short covering because of some negative news overseas.
Reports showed spot gold prices rose by about 9 percent last June, its highest since 2010, when it close to about US$1325 per ounce.
BSP Governor Amando Tetangco Jr. said the current level of the country’s international reserves is enough to cover 11-month worth of imports of goods and payments of services and income.
Also, it is enough to service 7.7 times the short-term liabilities of the country based on original maturity and 5.7 times based on residual 
maturity, which is defined as the “outstanding external debt with original maturity of one year or less, plus principal payments on medium and long-term loan of the public and private sectors falling due within the next 12 months.”
The central bank’s GIR target for 2014 is US$88 billion, higher than the US$83.19 billion reserves as of end 2013.
Tetangco, however, admitted earlier that the actual level can be lower than target because of lower value of gold.
Aside from gold prices factor, the country’s foreign reserves also benefited from the net foreign currency deposit of the Treasurer of the Philippines, and central bank’s income from investment overseas.
Tetangco, on the other hand, noted that these inflows were countered by the national government’s payments of its maturing foreign liabilities.
During the same month, the country’ net international reserves (NIR), which is the difference between the GIR and the country’s total short term debt, stood at US$80.7 billion from month-ago’s US$80.2 billion.

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