Philippines' forex surplus up a third at end-May

MANILA - The Philippines' balance of payments (BOP) surplus in the first five months of the year went up by more than a third from a year ago, the Bangko Sentral ng Pilipinas said on Wednesday.

Data from the BSP showed that the country's foreign-exchange surplus at end-May went up by 44.7 percent to $1.809 billion from $1.302 billion last year.

In May however, the surplus of $75 million was $63 million lower than last year's $138 million.

The BOP summarizes the country's economic transactions with the rest of the world. A surplus means the country earned more dollars than it paid for overseas transactions.

The BSP earlier reported that the country suffered net outflows of $641 million worth of foreign portfolio investments in May, a reversal of the net inflows of $1.1 billion in April and $106 million in May of last year.

The BSP forecast the country's external payments position to moderate to $3 billion by yearend on expectations of a 12 percent year-on-year increase in imports.

Sustained BOP surpluses help build up the country's gross international reserves (GIR), an ample supply of which helps prop up the peso and keeps domestic inflation at bay.

The country's dollar reserves slipped to $82.9 billion last month from $83.2 billion in April because of the drop in the price of gold in the international market, as well as payment of the country's foreign-currency debts.

source: interaksyon.com

Banks remain solvent with above-minimum capital ratios - BSP

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) on Friday said the country's banks remain solvent at end-September 2011.

In a statement, the BSP said the capital adequacy ratio (CAR) of the country's lenders stood at 16.44 percent on solo basis and at 17.43 percent on consolidated basis. This is well above the central bank's minimum of 10 percent and the international standard of eight percent.

Tier 1 capital ratios also were higher at 14.14 percent on solo basis and 14.23 percent on consolidated basis.

Tier 1 capital represents equity and excludes debt that qualifies as capital.

A high CAR indicates a strong buffer against losses.

source: interaksyon.com

BSP Enhances Debt Management System

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has upgraded its debt management and monitoring system with the adoption of the United Nations Conference on Trade and Development’s (UNCTAD) debt management and financial analysis system or DMFAS as part of its pro-active policy in controlling external debt.

The BSP said that the DMFAS is expected to improve its statistical infrastructure, systems and processes. “The initiative is considered timely in the face of sovereign debt problems in the euro zone and the US,” said the BSP. “(The Philippines) is expected to benefit from the system in further improving its debt profile given its healthy level of reserves, a well-spaced debt maturity structure, and a diversified mix of fund sources.”

Before the DMFAS, the central bank has its in-house debt monitoring system called the Integrated External Debt Management System or IEDMS which it has been using for 18 years. But, it said, the “rapidly changing financial landscape, coupled with the emergence of sophisticated financial instruments, as well as the increasing integration and linkages among economies, have heightened the demand for more detailed, current and comprehensive information on, and analysis of, external obligations.”

With the use of the DMFAS, the BSP explained that the new system will enhance the recording, monitoring and generation of external debt data, as well as improve compliance with international reporting standards. The system is also being used by 69 other central banks and finance ministries across the globe.

BSP Governor Amando M. Tetangco Jr. said that so far, the central bank has been successful in its debt management efforts.

Tetangco cites key ratios such as gross international reserves to short-term debt, outstanding debt to gross national income and debt service to foreign exchange receipts as “consistently strengthened” which for him, indicated the country’s “sustained and improving ability to meet maturing obligations.”

For 2012, the BSP has set a limit of $8.5 billion that both public or government and private sector or corporates can borrow in foreign currencies. This is lower compared to 2011’s foreign borrowing ceiling of $10.5 billion but the higher cap was because last year, the BSP was expecting more loans to fund Aquino government’s public-private partnership infrastructure projects.

The BSP and the government sets internal annual debt ceiling to monitor foreign borrowings from commercial sources, syndicated loans or from official development assistance or ODA funds.

source: mb.com.ph