The country's gross international reserves surged to a fresh record of $34.4 billion in January, boosted by the Bangko Sentral ng Pilipinas' aggressive dollar buying to temper the peso's rise, the BSP said yesterday.

The BSP is well on track of hitting the $34-$35 billion full year target.

BSP governor Amando Tetangco Jr. said total reserves could cover six months of imports of goods and payments of services and income.

He said the level is also equivalent to five times the country's short-term external debt based on original maturity and 3.1 times based on residual maturity, or debts of the public and private sector falling due in the next 12 months.

Tetangco said the growth in the reserves can be attributed to inflows from the BSP's net foreign exchange operations on the back of sustained foreign exchange inflows.

A weak dollar enables the BSP to buy more foreign exchange and beef up its dollar reserves.

However, with the peso continuing to strengthen, this has resulted in losses for the BSP. Through November last year, it chalked up losses of nearly P84 billion from the fluctuation in the exchange rate, leading to the BSP's incurring a P62.5-billion net loss during the period.

Of the $34.4 billion total reserves as of last month, $283 million were held in the foreign currency.

Meanwhile, Tetangco said the BSP's income from its investments abroad also contributed to the increase in the reserves.

The bulk or $30.1 billion of the country's reserves are invested in various high-yielding instruments overseas.

Tetangco said the reserves improved despite the payments made by the national government and the BSP on their maturing obligations last month.

In January, the BSP's net international reserves, including revaluation of reserve assets and reserve-related liabilities, also rose to $34.4 billion from $33.7 billion in December.

The NIR refers to the difference between the BSP's GIR and total short-term liabilities.