|Philippine 100 peso bill (Photo credit: Wikipedia)|
The government should take this as an opportunity i.e. using the reserves wisely including renegotiating and prepaying some of our high interest bearing debts; retiring our dollar loans with high interest rates, take advantage of ODAs that require huge counterparts, among others.
According to the BSP: The country’s foreign exchange reserves are set to scale new heights this year and the next, as the Bangko Sentral ng Pilipinas expects the figure to hit $83 billion by the close of December, and $86 billion by end 2013. The BSP said dollar inflows would stay robust amid continuing improvements in the Philippines’ macroeconomic fundamentals. “We expect a higher surplus in the balance of payments this year, the effect of which may be carried over to 2013,” BSP Governor Amando Tetangco Jr. told reporters Tuesday.
The BSP earlier reported that gross international reserves (GIR) amounted to $82.1 billion at the end of October. That amount would be enough to cover nearly a year’s worth of the country’s imports, and 6.6 times the total outstanding debt owed by the government and private sectors to foreign creditors.