The Philippines' foreign exchange reserves surged to a new record high of US$32.4 billion at end-October from $30.9 billion at end-September as the central bank bought more dollars to slow down the peso's rise.
The peso Wednesday rose to a new seven-year high of 43.275 to the dollar, leading the rally of Asian currencies, as the US credit jitters that spooked global markets earlier this week fizzled out.
The peso closed near the day's peak of 43.27 to the dollar, strengthening from Tuesday's finish of 43.61. The volume of trading was $749.2 million.
Banco de Oro-EPCI strategist Jonathan Ravelas said the peso was supported by the onset of the season for strong inflows of overseas Filipino workers' cash remittances ahead of the Christmas holidays. He added the weakening of the dollar against the euro amid talk that China might diversify its foreign reserves also perked up the peso.
"At this speed, 43 to one (dollar) is just around the corner," Ravelas said.
On the gross international reserves (GIR), Governor Amando Tetangco Jr of the central bank, Bangko Sentral ng Pilipinas (BSP), attributed the increase of $1.5 billion or 4.9 per cent month-on-month to the central bank's "foreign exchange operations due in turn to the continued strong inflows of foreign exchange as well as receipt of income from the BSP's investment abroad".