An economist forecasts a continued increase in the country’s dollar reserves, which improved to $99.72 billion last January compared to the previous month’s level.

Data released by the Bangko Sentral ng Pilipinas (BSP) Tuesday night showed that the January 2023 gross international reserves (GIR) of the country, however, was lower than the $107.69 billion in the same period in 2022.

In a commentary on Wednesday, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the country’s dollar reserves can get a lift from continued resiliency of the inflows from overseas Filipino workers (OFWs), the revenues of the business process outsourcing (BPO) sector, foreign investment inflows, foreign tourism, and Philippine offshore gaming operators (POGO) revenues.

These inflows, he said, “could still cover the yearly trade deficit/net imports that reached a record $58.3 billion for 2022.”

“Moreover, the continued increase in fund-raising and other investment banking activities by the country’s biggest companies/conglomerates, in view of the recent rising trend in global/local bond yields in recent months, funding preparations amid more decisive new investments and expansion plans as the economy reopens further towards greater normalcy, could entail some increase in foreign investment inflows that could add to the country’s BOP and GIR, on a cash flow basis,” he said.

Ricafort said the current GIR level of the country remains adequate as it is equivalent to 7.5 months of imports, higher than the three to four months international standards.

He said the dollar reserves to date “would continue to provide structural support/buffer/cushion for the peso exchange rate, especially greater protection vs. any speculative attacks, going forward.”

CURRENTPH NEWS SERVICE