BSP secures $734 million in borrowing for October

The Bangko Sentral ng Pilipinas (BSP) Increases Gross International Reserves by $2.919 Billion in October

The Bangko Sentral ng Pilipinas (BSP) has announced their availing of $734 million worth of short-term loans in October as a part of their international reserve management strategy. This action directly contributed to a total increase in the country’s gross international reserves (GIR) to $101.035 billion by the end of October.

The increase of $2.919 billion from the end of September’s $98.116 billion signifies a notable strengthen in the Philippines’ international reserves. More data reveals that the BSP has not increased its GIR-related liabilities in the last decade, with the data only dating back to 2013.

This latest transaction comes in the wake of the BSP’s participation in the International Monetary Fund (IMF) financing back in 2013, as a credited and active member of the IMF.

In addition to this, the country’s net international reserves (NIR) has seen a significant increase of $2.223 billion as of the end of October 2021, reaching a total of $100.301 billion. The NIR refers to the difference between the BSP’s reserve assets or the GIR and reserve liabilities. Reserve liabilities are short-term foreign debt and credit and loans from the IMF.

The BSP has shown its commitment to the IMF through various facilities as standby resources, with a total commitment of $2.26 billion as of end-2022, up from $1.8 billion in 2021. This includes a bilateral borrowing agreement (BBA) worth $575 million which the BSP said will likely be renewed by the end of 2023. The BBA is the central bank’s commitment to provide resources to the IMF to finance arrangements for countries with BOP difficulties.

Furthermore, the BSP revealed that it has repaid part of its loans in 2009, which consisted of $1.2 billion securities-backed loans from the Bank for International Settlements (BIS) and another $1 billion gold-backed loans or repurchase deposit from JP Morgan Chase.

In a broader context, the BSP has made remarkable progress in managing and reducing its outstanding foreign debt over the years. In 2000, BSP had a loan burden of almost $5 billion which significantly decreased to just $440 million by 2006.

This achievement illustrates the BSP’s commitment to maintaining a robust and sustainable international reserve management strategy, providing significant insight into the prudent financial management that underpins the economic stability of the Philippines.

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