[September 05, 2008] GIR dips as gold loses shine Tweet (The Manila Times Via Acquire Media NewsEdge) Sep. 6--THE country's dollar reserves fell slightly last month as the value of local gold holdings slipped in line with recent weakness in the price of the precious metal, the Bangko Sentral ng Pilipinas (BSP) said Friday. In a statement, the BSP said the country's gross international reserves (GIR) dropped $200 million to $36.7 billion at end-August, compared with $36.9 billion the month before. "The decrease in the GIR was due mainly to the negative revaluation from the lower value of the BSP's gold holdings following the decline in the international price of gold," the central bank said. The value of the BSP's gold holdings registered a loss of $332 million, thus declining to $3.568 billion last month from $3.904 billion in July. Even with the fall in gold prices, foreign investments increased to $32.688 billion in August from $32.545 billion in July this year. Foreign investments include placements in US treasury instruments. At their current level, the Philippines' dollar reserves can cover 6 months of imports of goods and payments of services and income. The country's dollar stock could also pay five times over its short-term external debt based on original maturity and 2.9 times the same obligations based on residual maturity, which includes current portions of long-term debt. Excluding the country's short-term liabilities, the level of net international reserves declined by $400 million to $36 billion. Despite the slight drop in the country's reserves, BSP Governor Amando Tetangco Jr. remained confident of ending the year with a dollar cache of between $36.5 billion and $37 billion. Earlier, the central bank said the country's GIR would climb to between $39 billion and $40 billion next year on account of higher remittances from overseas Filipino workers. This would enable the country to enjoy a $2.5 billion balance of payments (BOP) surplus, or the same as the forecast for this year. The BOP measures the country's economic transactions abroad, with a surplus indicating the country earned more dollars than it gave up. Ample reserves meanwhile would prop up the peso, thus tempering domestic price increases. Latest official data showed that inflation last month accelerated to a 17-year high of 12.5-percent due to high food and fuel prices. To see more of The Manila Times, or to subscribe to the newspaper, go to http://www.manilatimes.net. Copyright (c) 2008, The Manila Times, Philippines Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. [ Back To TMCnet.com's Homepage ]