The national government should consider increasing its foreign borrowing this year to beef up the country’s reserves amid slowing foreign portfolio and export inflows.

Bangko Sentral ng Pilipinas (BSP) deputy governor Diwa Guinigundo said borrowing more from the foreign market was a "good option" since it would secure foreign exchange that the government would require for debt servicing.

"It would provide them additional comfort that if and when they need foreign exchange, they would have it. That is something that the government may wish to consider," he said.

Earlier, BSP governor Amando Tetangco said the central bank has built up reserves to buffer the expected slack in foreign exchange inflows from investments and exports in 2009.

"Reserves are built up precisely as insurance for rainy days," Tetangco noted.

In 2008, the country’s gross international reserve was projected to hit $36 billion, with the balance of payments (BOP) keeping a surplus of about $500 million.

Tetangco said the 2009 numbers were still being reviewed and the revised projections could not be released until early January when the latest data have been incorporated.

"It is difficult to predict the extent risk appetite will retreat from the market," the BSP chief said.

Nonetheless, Tetangco said he was comfortable with the country’s reserve levels.

According to him, the BSP was expecting robust inflow of foreign exchange in the form of remittances from overseas Filipino workers and foreign exchange receipts from the growing business process outsourcing sector.