Manila (Philippine Daily Inquirer/ANN) - The Philippines' gross international reserves (GIR) surged 11 per cent in June to US$76.29 billion from $69 billion a year ago, aided partly by the central bank¿s income from its portfolio investments and the increase in the price of gold in the world market.
The Bangko Sentral ng Pilipinas (BSP), central bank of the Philippines, yesterday reported that the end-June GIR was also up 0.3 per cent from $76.08 billion in the previous month.
The Philippines¿ usual sources of foreign-exchange reserves are remittances from overseas Filipinos, investments in portfolio instruments and export earnings.
The BSP said the latest GIR was equivalent to 11.2 months' worth of the country's imports and was six times the country's short-term debts denominated in foreign currencies.
Monetary officials said the reserves indicated a comfortable external liquidity of the country.
They said the reserves were one of the reasons the country¿s credit image has improved over the years. Earlier this week, international credit-rating firm Standard & Poor¿s raised the country¿s credit rating from BB to BB+, just a notch below investment grade.
S&P cited the country¿s rising external liquidity and the declining debt burden of the national government. Both manifested the country¿s improving ability to pay its liabilities to foreign creditors, it said. The rating was assigned a "stable" outlook, which means it could stay the same for about a year until the next review.
Fitch Ratings likewise assigned the Philippines a rating that was a notch below investment grade. Moody's Investors Service, the most pessimistic among the three major international credit watchdogs, assigned the Philippines a rating that was two notches below investment grade.
The Philippines is pitching for an investment grade, which economic officials believed could substantially drive job-generating foreign direct investments into the country. Economic officials claimed that some of the country¿s economic indicators were already comparable to those of countries with investment grade.