Philippines

August 2008 | Risk Summary

The Philippine central bank is to receive a US$500mn short-term loan from the Basel-based Bank for International Settlements (BIS), which it will use to boost its foreign exchange reserves. The Philippines' foreign reserves stood at a record US$36.7bn in June, and the loan - which carries a three-month term - has created speculation that the monetary authorities are to use the additional reserves to manipulate its currency, as it continues to battle against double-digit inflation. However, central bank Governor Amando Tetangco has moved to calm such fears, insisting that the loan was merely part of normal banking operations.

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