Friday, April 5, 2013
HIGH FOREX RESERVES, BOON FOR PHL ECONOMY, SAYS MAGSAYSAY
Team PNoy senatorial candidate former Sen. Ramon “Jun” Magsaysay Jr. on Saturday /April 6 lauded the Bangko Sentral ng Pilipinas for the continued rise of the country’s foreign gross international reserves, pointing out that this is another powerful tool which the government can use to further boost the economy.
“Such reserves can impact on the exchange rates and on the import-export economy as well,” said Magsaysay. “This is another indication that the country is finally taking off under the Aquino administration.
The Philippines’ gross international reserves (GIR) climbed to $84.1 billion last month from P83.6 billion in February, according to the BSP. The central bank expects it to hit P86 billion this year.
The March reserves, explained BSP Governor Amando Tetangco Jr. is enough to cover 11.9 months worth of import goods and payments of services and income. It is also equivalent to 9.9 times the country’s short-term external debt based on original maturity and 6.3 times based on residual maturity.
“Higher reserves mean a country is rather powerful from the economical and financial point of view,” Magsaysay said. “Having a strong back up, a country can provide negotiations concerning reduced interest rates on its debt and close negotiations with huge international partners on much better terms.”
Magsaysay explained that with higher reserves, the Philippines can choose whatever strategy it wants to further improve its economic footing.
“To attract more foreign potential customers and investors, the Philippines , with its strong market reserve, can weaken the peso on purpose as what the BSP is now doing, keeping it at the P40 to the US dollar level,” Magsaysay said.
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