The Philippine Economy

[april boy]

Amcham pushes lower
importation cost for CBUs

Malaya Business Insights
August 17, 010


The American Chamber of Commerce of the Philippines (Amcham) seeks to lessen the importation of completely built-up (CBU) vehicles to allow locally-assembled ones to thrive.

Amcham executive director Rob Sears told reporters that imports should be limited to high-end models because that segment of the market is too small.

Sears government should find a way where CBU imports and locally-assembled vehicles would co-exist in the market because "not all can be produced locally."

"I say you stick to those models (luxury) for importation," he said.

Sears said the government should adopt a national policy that would create jobs in the manufacturing sector as well as the supply chain - in this case, automotive assembly and their accompanying parts and components - for both domestic and export markets.

"The parts manufacturing industry is a billion-dollar industry. The more local parts that can be sourced locally, the better for the automotive industry," Sears said.

Sears cited the case of Ford Motor Co. which came in to serve both domestic and Asean markets.

He said Ford started to develop the supply chain to supply local assemblers and manufacturers worldwide.

"Because of the back and forth (policy) of government, that did not progress strongly," Sears said. Ford is currently the lone exporter of locally-assembled CBUs for export to ASEAN.

Sears said the new Motor Vehicle Development Program (MVDP) should be able to address the need to build a manufacturing base for the local and domestic markets as this "creates jobs and generates economic activity."

Sears said a proposal to revive the Tamaraw, Fiera and Harabas for export should just be encouraged and not imposed on manufacturers.

"It’s up to the players to decide. Government shouldn’t dictate business because they will go away or close shop. This sends (a bad) signal to all other businesses," Sears said.

Sears said these models may be ideal for export as envisioned by the Board of Investments.

"If there is a market for them, fine, it is still up to the players," Sears said. - Irma Isip

[Ady001]

Dapat lang talaga... I'd rather buy them than those ones made outside because they're more adapted to the local clime.

[filcan]

Originally Posted by NOVO ECIJANO

tsk..tsk..tsk..Its so sad Indonesia once a very poor country,ngayon nalampasan na tayo.

Its a strange fact that Indonesia has the largest economy in Southeast Asia (member of G20) but you just dont see it in that country, externally.

[GodIsNotGreat]

The Philippines is ranked 63 out of a total of 100 countries. We are ahead of Indonesia and Saudi Arabia. Singapore is ranked #20, and both Malaysia and Thailand are ahead of us as well.

The magazine ranked the countries in five categories: education, economic dynamism, health, political environment, quality of life.

We ranked high in education (46). I guess this says a lot about our colleges and universities, and if we will push through with the K12 Program, who knows, we may make more substantial strides.

It was in Quality of Life (75) that dragged our overall score. A lot of our people are living below the poverty line. The government has a lot of work cut out for it.


http://www.newsweek.com/2010/08/15/i...countries.html

[Narnian_King]

http://www.timesofmalta.com/articles...-gambling-gold

The Philippines aims to strike gambling gold

Karl Malakunas, AFP

The skyline of Manila Bay. Four licences to build Entertainment City on reclaimed land along the bay were awarded in 2008.

The Philippines aims to become Asia’s next big gambling hub with casino and entertainment resorts to be built in tourist spots across the country, the nation’s gaming regulator said.

An “Entertainment City” in Manila to rival boom towns Macau and Singapore is at the heart of the plan and will hopefully be finished by 2014, Philippine Amusement and Gaming Corporation (Pagcor) chairman Cristino Naguiat said.

“The casino industry here in the Philippines has a very huge potential in terms of revenues,” Mr Naguiat, who took over as chairman a month ago, said in an interview with AFP.

“We are way behind Macau and Singapore in terms of the casino industry... (but) we would like to be positioned right at the top.”

Like other Asian gambling industries, the Philippines wants to tap into the vast mainland Chinese market, Mr Naguiat said. “We are maybe not even getting 0.01 per cent of what is the potential market there,” he said.

Mr Naguiat said the government eventually hoped to build integrated casino and entertainment resorts in other parts of the Philippines, including picturesque Palawan island and Cebu, the nation’s second biggest city.

Pagcor was open to hearing from foreign players interested in participating, he said. “We would like to receive their proposals,” Mr Naguiat said.

However, he emphasised that only proposals incorporating other entertainment aspects besides gambling, such as amusement centres and museums, would be considered. “It has to be an integrated resort, not just a casino and a hotel.”

Four licences to build Entertainment City on reclaimed land along Manila Bay were awarded in 2008 under the previous government of President Gloria Arroyo.

Japanese gambling firm Aruze Corp. and a Philippine joint venture with an arm of Malaysia’s Genting Group won two of the contracts to build casinos at the resort.

Local high-end property developer Belle Corp and Bloombury, headed by Philippine business magnate Enrique Razon, won the other contracts.

Mr Naguiat acknowledged delays in starting construction, partly because the companies did not want to proceed during the final phase of Ms Arroyo’s government.

“They were scared of doing it during the previous government because they were pretty sure that the new government would review all of these contracts,” he said.

He said the new government of President Benigno Aquino, which took office on June 30, was indeed reviewing the situation and Pagcor would ensure the licencees build a fully integrated resort including museums, amusement parks and shopping centres.

“It should be more than the casino. That’s what we are trying to emphasise, that the casino is the money earner for the project but we would like to see more than the casino,” he said.

Mr Naguiat said Pagcor was aiming to present Ms Aquino with a review of Entertainment City and other aspects of the gaming industry by the end of the month.

The four Entertainment City licencees would then be given the government’s requirements in September.

Each licencee was required to spend at least one billion dollars in developing the resort, he added.

However, he indicated that some big-ticket items promoted by Pagcor under the Arroyo government would likely be scrapped, among them one of Asia’s tallest observation towers, a sports stadium, a race track and a nursing home.


Goodbye F1

[RonnieR]

Originally Posted by GodIsNotGreat

The Philippines is ranked 63 out of a total of 100 countries. We are ahead of Indonesia and Saudi Arabia. Singapore is ranked #20, and both Malaysia and Thailand are ahead of us as well.

The magazine ranked the countries in five categories: education, economic dynamism, health, political environment, quality of life.

We ranked high in education (46). I guess this says a lot about our colleges and universities, and if we will push through with the K12 Program, who knows, we may make more substantial strides.

It was in Quality of Life (75) that dragged our overall score. A lot of our people are living below the poverty line. The government has a lot of work cut out for it.


http://www.newsweek.com/2010/08/15/i...countries.html

This is a new one. Our standing in the world is almost the same with United Nations Dev't. Programme (UNDP).

If we push for higher GDP and better quality of life, surely, Philippines' ranking would go higher.

[epik ll ian]

HAHA that's true. Weird how we're getting our news from Malta of all places

[xxxriainxxx]

Originally Posted by epik ll ian

HAHA that's true. Weird how we're getting our news from Malta of all places

My thoughts exactly, suddenly a tiny island nation in the Mediterranean is our source of news.

[RonnieR]

Huge amount....

Philippines says 2011 gross borrowing plan at $17 bln

http://www.reuters.com/article/idUSM...ksNews&rpc=401
MANILA | Tue Aug 17, 2010 4:32am EDT

MANILA Aug 17 (Reuters) - The Philippines is planning gross borrowing of 772.9 billion pesos ($17.1 billion) next year, up 2.4 percent, or 18 billion pesos, from this year, National Treasurer Roberto Tan said on Tuesday.

Of this amount, 27 percent or 209.6 billion pesos would come from foreign sources, including 117.5 billion pesos from offshore debt markets. At the government's assumed exchange rate of 47 pesos per dollar, it plans to borrow $2.5 billion from global debt markets next year.

The remaining 563.3 billion pesos would be sourced locally, Tan said. ($1 = 45.2 pesos) (Reporting by Rosemarie Francisco; Editing by John Mair)

[RonnieR]

DOF not keen on Ramon Ang's $10-B offer for PAGCOR
abs-cbnNEWS.com
Posted at 08/17/2010 5:48 PM | Updated as of 08/17/2010 5:49 PM

MANILA, Philippines - The government is not satisfied with the $10-billion offer of businessman and San Miguel Corp. Vice-Chairman Ramon S. Ang for Philippine Amusement and Gaming Corporation (PAGCOR).

"That's too cheap," said Finance Undersecretary John Philip Sevilla, who heads the department's privatization group.

Sevilla said the government is not in a hurry to privatize PAGCOR since there are no official proposals to buy the state's gaming agency,

"We're not concerned about personalities. What we're saying is, if PAGCOR is privatized, it should be done through open, transparent and competitive process," he said.

Several state assets are being eyed for privatization to shore up the government's budgetary deficit.

Finance Secretary Cesar Purisima earlier said that only the commercial side of PAGCOR will be privatized while regulatory control would be retained by the government.

PAGCOR contributes to the social fund of the Office of the President.

In the first half, PAGCOR remitted P5.04 billion to the government, lower than the P5.488 billion turned over in the same period in 2009.

Under its charter, PAGCOR is mandated to remit at least 50% of its annual earnings to the government.

It booked an unaudited P29.78 billion income in 2009, compared to P29.61 billion in 2008.
http://www.abs-cbnnews.com/business/...b-offer-pagcor

[Kintoy]

for those who are so obsessed with how the Philippines rank:


China: Helping poor matters more than economy rank

By JOE McDONALD (AP) – 5 hours ago

BEIJING — China's government said Tuesday it still is a developing country despite becoming the second-largest economy, reflecting its reluctance to take on new obligations on climate change and other issues.
Beijing needs to improve life for millions of impoverished Chinese, said a Commerce Ministry spokesman, Yao Jian. It was the government's first public reaction to news Monday that China passed Japan in economic output in the April-to-June quarter, confirming its arrival as a global commercial power.

"China is a developing country," Yao said. "The quality of China's economic development still needs to be raised. It needs more effort to improve economic quality and people's lives."

Rapid growth has boosted the communist government's political and economic influence abroad. But Beijing has resisted adopting binding limits on greenhouse gas emissions or making commitments in other areas such as easing controversial currency controls or guaranteeing foreign suppliers equal treatment in government purchasing.
China overtook Japan after Tokyo on Monday reported quarterly gross domestic product of $1.286 trillion, behind China's $1.335 trillion reported earlier.

[kalbongdad]

wla na excitement......coz the person that really knows on what to do with the economy......just got replaced by a person who is clueless of what to do with the economy really.......only good in pointing accusing fingers.... pag bumagsak ang economy and believe me it will because of the continuing deterioration of the u.s. economy of which the pinas economy is dependent.....considering his not so good record.....pano na naman ang pinas mapagiiwanan na naman......mas pinili ng tao ang pa cute na wlang alam sa mataray na maraming alam....

[Sleepwalker]

Puro na nga good news ang bino-broadcast sa ABS-CBN at print media, di ka pa rin kontento?

Alam mo namang wala na tayong option, kasi si Binay naman ang second in command.

Lalanghapin muna natin ang momentum nang magandang economy na gawa ni GMA, after that, higpitan na ang sinturon...

Ito yong oobserbahan ko sa administrasyong ito:

- Can they sustain and religiously run after those erring officials for 6 years?
- Can they make sure, that within 6 years, there will be no one within their ranks who will commit any act of corruption.
- What will happen to our economy.

Sa ngayon, konting comments lang muna...

[april boy]

Hmmm. let's get back to economic issues....


Speaking of Pagcor...


Pagcor posts P15.54B in H1

Malaya Business Insights
August 18, 2010

The Philippine Amusement and Gaming Corporation (Pagcor) posted an unaudited revenue of P15.54 billion from January to June 2010, exceeding its P14.6 billion income for the same period last year by 6.43 percent.

Pagcor attributes its financial success this year to the increase in winnings of its 13 casino branches nationwide, fueled by the commitment of its 12,000-strong workforce, the implementation of sound marketing strategies and the economy’s recovery from the global financial crisis.

But while a big chunk of its total revenue comes from casino operations, almost one-third also comes from other sources such as share from business franchises and licenses, hotel operations, rent from proponents and entertainment – such as paid performances within the gaming premises, among others.

In 2009, Pagcor posted a total annual income of P30.31 billion. With this year’s promising outlook, the Pagcor management is optimistic that it can match, if not surpass last year’s performance.

As mandated by law, P8.06 billion or more than half of Pagcor’s profit in the first semester goes to government-mandated contributions. The largest chunk of this amount goes to the National Treasury in the form of remittances (P5.16 billion) and the President’s Social Fund (P1.01 billion).

Pagcor’s other legally mandated beneficiaries include the Philippine Sports Commission (P258 million) and the Board of Claims (P6.4 million), an agency under the Department of Justice that evaluates and conducts independent hearing for victims of violence and unjust imprisonment. The state-run gaming firm also earmarked substantial portions of its income to fund vital laws such as the Museum Endowment Fund for the preservation and promotion of the country’s history and cultural heritage; Early Childhood and Development Fund for the psychosocial development of preschool children in the country; Sports Benefits and Incentives for Filipino sportsmen; National Book Development and Trust Fund for Filipino schoolchildren; Pagkaing Alalay Para sa Pamilyang Pilipino (PAMANA) Project to promote food production for urban poor families; and host cities’ share to fund the socio-civic programs of localities where Pagcor casinos operate.

[april boy]

BSP confident FDIs to hit
$2B target this year

BY JIMMY CALAPATI
Malaya Business Insights
August 18, 2010

The Bangko Sentral ng Pilipinas (BSP) is confident that foreign direct investments (FDIs) will hit the $2 billion target set by the government this year even if year-to-date inflows are lower than last year.

"We are bullish that as the PPP (public-private partnership) initiative of the national government takes off, we will see investments flow in as we had projected," BSP governor Amando Tetangco said.

The cumulative FDIs for the first five months continued to register net inflows, although 68 percent lower compared to the same period last year as investors remained jittery due the possible spillover effects of the euro zone economic woes.

FDIs, or foreign investments in fixed assets such as factories and equipment, amounted to $446 million during the first five months against $1.393 billion for the same period last year.

Tetangco attributed the higher inflows in the first half of 2009 to a number of equity capital infusions arising largely from the privatization of a local power corporation and the acquisition of a significant number of shares by Kirin Holdings in San Miguel Corp. amounting to $141.8 million in April 2009.

Tetangco said investors, as expected, tended to be cautious during the second quarter because of the elections.

But as the new government starts to take shape, Tetangco said investments will start flowing in.

In May, FDIs posted a net outflow of $35 million, compared to the $446 million recorded for the same month last year.

Tetangco said that the net inflows for the period January-May 2010 stemmed largely from the improvement in the other capital account consisting mainly of inter-company borrowing/lending between foreign direct investors and their subsidiaries/affiliates in the Philippines which reversed to a net inflow of $330 million from a net outflow of $38 million a year ago.

Net inflows of equity capital during the five-month period totaled $46 million, considerably lower than the $1.5 billion recorded during the comparable period last year.

Tetangco said the inflows during the first five months came mostly from the US, Switzerland, Japan, Netherlands, Singapore and Hong Kong.

These were directed to the manufacturing, services, real estate, financial intermediation, utilities, mining, and transportation/storage sectors.

Reinvested earnings also recorded net inflows of $70 million, a reversal of the $24 million net outflows posted a year ago.

[april boy]

Ford RP operations deemed uncertain

By Abigail L. Ho
Philippine Daily Inquirer
First Posted 20:18:00 08/17/2010

THE FUTURE of the manufacturing operations of Ford Group Philippines, the country’s only car exporter, is on shaky ground, as neighbors such as Thailand continue to aggressively provide more perks to vehicle assemblers and exporters than the Philippines.

FGP president Randy Krieger told reporters that the firm’s Sta. Rosa, Laguna, factory was now running at a robust capacity, churning out a combined 15,000 units of the Focus, Escape, and Mazda 3. Of the total, 10,000 units went to the export market.

By 2012, however, the production of the Focus, FGP’s best-selling model in the Philippines, would be transferred to Thailand, he said.

While he said that parent firm Dearborn, Michigan-based Ford Motor Corp. was studying what possible new models could be manufactured in the Philippines, he did not say with absolute certainty whether a new model would really be brought into the country once production of the Focus is transferred to Thailand.

FGP earlier said the investment in the Focus manufacturing plant in Thailand would have no impact on its current manufacturing operations. No mention was made on how this development would affect local operations two years from now when the transfer of Focus actually takes place.

In the meantime, Krieger said local production continued at a healthy pace, with FPG’s plant producing more this year than in 2009.

Asked what criteria Ford used in making its investment decisions, he said these included the size of the domestic market and its needs, as well as the incentives offered by the government.

“Incentives play a big part in (our decision). Current export incentives have been very helpful to make the Philippines competitive with Thailand. We support the new framework presented by (Executive Order 877-A), but we need to understand the specifics,” he told reporters Monday evening at the Philippine launch of the Ford Fiesta, Ford’s first foray into the small-car segment.

The implementing rules and regulations for EO 877-A, or the Comprehensive Motor Vehicle Development Plan, is now being threshed out by the government, with inputs from industry stakeholders, including vehicle and parts assemblers.

“EO 877-A is the framework. We, together with other local groups, are helping the government develop what the programs should be and all the specifics,” he said.

Thailand is the region’s biggest vehicle maker, producing 1.2 million units a year, vis-à-vis a population of 67 million. By comparison, the Philippines produces only about 50,000 units a year, with its population placed at 92 million.

In other developments, the Fiesta, Ford’s answer to Toyota’s Vios and Honda’s Jazz and City, will be available in the Philippines by October in four variants: the 1.4-liter Style model with manual transmission, P670,000 the 1.4-liter Trend model, P685,000; the 1.6-liter Trend model with Power Shift automatic transmission, P766,000, and the 1.6-liter Sport model with Power Shift automatic transmission and voice-activated entertainment system, P816,000.

[april boy]

Total remittances may
reach $19.4B this year

Malaya Business News
August 19,2010

Money sent home by overseas Filipinos (OFs) may yet surprise doomsayers.

The Bangko Sentral ng Pilipinas (BSP) yesterday said that total remittances may surpass the 8 percent projected growth this year, possibly exceeding $19.4 billion as many OFs still employ services of non-banks in sending their hard-earned dollars home.

"Approximately around that figure," BSP governor Amando Tetangco said at the sidelines of yesterday’s economic briefing.

At the present target growth rate of 8 percent, remittances for this year will only reach $18.7 billion.

Although Tetangco said that the present target growth rate still holds, they, however, are not discounting the possibility of more OFs using non-bank facilities.

"(The growth targets) will be reviewed by October," Tetangco said.

Tetangco added that recent studies show that OFs using non-bank facilities constitute around 5 percent of the total OF workforce.

Latest data from the BSP showed that during the first quarter of this year, remittances coursed through banks reached cumulative amount of $4.3 billion.

The data showed that the amount of remittances coursed thru non-bank facilities reached $200 million, bringing the total remittances for the first quarter to $4.5 billion.

Following this trend, full year remittances coursed through non-banks may reach between $700-800 million, which will bring total remittances for this year to $19.4 billion.

Tetangco earlier said that the continued expansion in the number of banks’ branches, remittance centers and correspondent banks and tie-ups has resulted in the stronger presence of financial institutions abroad, which in turn, helped capture a bigger share of the global remittance market.

As of June 2010, these remittance conduits totaled 4,351 compared to 3,730 last year.

But he said that they are also aware that some OFs prefer using other means of sending money home, specifically thru the "pakipadala" system.

BSP early this week said that OF remittances coursed through banks in the first half of the year amounted to $9.1 billion, posting a year-on-year growth of 6.9 percent compared to the same period in 2009.

In June alone, remittance flows peaked at $1.6 billion—the highest on record--reflecting a year-on-year expansion of 8.3 percent boosted by remittances from both sea-based and land-based workers.

Tetangco said that the "continued deployment of professional and skilled Filipino overseas workers, given favorable global employment opportunities, underpinned the resilience of remittances."

Preliminary data obtained from the Philippine Overseas Employment Administration (POEA) indicated that workers classified as new hires with processed contracts and are awaiting deployment rose by 13.5 percent to 212,700 for the period January-June 2010 from 187,338 in the same period last year.

Moreover, for the first seven months of the year, approved job orders aggregated 356,878, of which more than a third consisted of processed job orders for service, professional, technical, and production and related workers.

Tetangco added that work prospects overseas for Filipino seafarers were also reported by the Department of Labor and Employment (DOLE) following plans of the Japanese Shipowners’ Association (JSA) to hire 2,000 seabased workers as officers and crew of high-end Japanese vessels in the next two years.

BSP said that the main country sources of remittances were the US, Canada, Saudi Arabia, Japan, the U.K., Singapore, United Arab Emirates, and Italy.

[april boy]

DTI open to more eco zones

Malaya Business Insights
August 19, 2010

Trade Secretary Gregory L. Domingo yesterday said he is open to the setting up more economic zones to accommodate demand for new industrial sites as long as these are run by the Philippine Economic Zone Authority (PEZA).

Domingo told reporters at the sidelines of the Philippine Mid-Year Economic Briefing that he supports moves by the Department of Finance to review the incentives given to enterprises due to the tight fiscal situation.

He said six industries which are competitive and which have enormous potential will get priority. These are tourism, BPO/IT services, electronics, mining, housing and agribusiness.

Domingo said government will only give incentives in cases where these will tip the balance in attracting investments.

"We will use incentives when they matter. Even if the investment amount is big or even if it is not in the priority list, if the investment will come in anyway, why give it incentives? We have to give incentives sparingly," Domingo said.

He said the government balks at the idea of creating more freeport zones but supports more ecozones under PEZA due to the agency’s track record.

"We have no need for new freeport zones. PEZA zones can be used as vehicles (in attracting investments) because they are well-managed," Domingo said.

He said the advantage of PEZA zones is that they practically do not have to deal with local government units. This the zones registered with the Board of Investments cannot do because they have to seek permits.

"We are encouraging (more ecozones) in the business process outsourcing and call center industries where buildings and parks can host investments," Domingo said.

Domingo said special ecozones have world-class infrastructure and doing business is relatively easier in them compared to non-PEZA projects where infrastructure is inadequate and doing business is cumbersome.

"The electronics sector is the best testament in doing business in the PEZA zones. Great success has also been achieved in the BPO/IT in these zones," Domingo said. - Irma Isip

[april boy]

BoI, DoF in agreement on move to rationalize gov’t fiscal incentives

By BERNIE CAHILES-MAGKILAT
August 18, 2010, 4:52pm
Manila Bulletin

The Board of Investments (BoI), the government’s premier investment generating agency, will not object to moves by the Finance Department to rationalize fiscal incentives saying the government is running on deficit spending and that any incentives should be granted only to investments that matter the most.

Trade and Industry Secretary and BoI Managing Head Gregory L. Domingo told reporters at the sidelines of the Economic Ministers Briefing Wednesday he agreed with the Finance Department’s call to rationalize fiscal incentives in light of the government’s budgetary deficit.

Finance Secretary Cesar B. Purisima announced at the briefing that the passage of a bill rationalizing fiscal incentives would among his priorities.

“I agree with Finance that we use incentives sparingly because of the fiscal deficit so we have to give incentives where it matters the most,” Domingo said.

In the past, the BoI and the DoF had been at loggerheads over incentives to investments with the DoF wanting to trim some incentives to save government revenues as against BoI’s continued granting of tax perks to attract more investors.

The BoI’s position is that there is no government revenue loss if there is no investment inflow and investments that are given incentives are going to generate economic activity and create employment opportunities.

In a playing field that is not level, given the country’s high cost of power and labor, the incentives is a great equalizer.

“We shall use incentives only in situations that will tip the balance in favor of the country,” Domingo said.

Domingo has identified six industries that the government will prioritize in its investment promotion. These are tourism, BPO/IT, electronics, mining, housing and agri-business.

[april boy]

July BOP surplus seen hitting $100M

By Michelle Remo
Philippine Daily Inquirer
First Posted 21:19:00 08/18/2010

Filed Under: Economy and Business and Finance

THE COUNTRY is expected to post a balance of payments surplus of between $90 million and $100 million in July.

A $100-million BOP surplus in July would bring the total surplus for the first seven months of the year to $3.34 billion, up 23 percent from only $2.72 billion in the same period last year, said Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. Wednesday.

As of Wednesday, the BSP was still finalizing the numbers for the BOP in July.

Tetangco said foreign currency inflows to the Philippines were rising, due largely to sustained growth in remittances and modest rise in investments, particularly portfolio investments.

BOP is a closely watched economic indicator that serves as a record of the country’s commercial transactions with the rest of the world. It is the difference between the inflows and outflows of dollars and other currencies to and from the country.

Foreign currency inflows that help boost the BOP include export revenues, remittances from Filipinos based overseas, loans and grants extended by offshore creditors, and investments—either portfolio or direct—by foreign nationals.

Outflows represent payments of imported goods and services, and settlement of debts denominated in foreign currencies.

Surplus in the BOP increases the country’s reserves of foreign currencies, or the gross international reserves (GIR), which determines the country’s ability to pay for imported goods and services, and to engage in other commercial transactions with foreigners.

Earlier, the BSP reported that the country’s GIR stood at $48.6 billion as of end-July, up 21 percent from $40.17 billion a year ago.

The latest GIR was enough to cover nine months worth of usual imports. It was also 5.1 times the country’s foreign currency-denominated debts maturing within one year.

In a study released earlier, the Asian Development Bank said foreign exchange reserves should at least be worth four months of imports to stay comfortable. Countries with reserves more than the four-month threshold may consider investing portions of the money in more productive activities to benefit their economies.