The foreign currency holdings of Bangko Sentral ng Pilipinas (BSP) through forward swaps slid to $3.56 billion at end August, the lowest so far this year, as the monetary authority aggressively defended the falling peso, official data showed on Tuesday. 

 

The central bank's stock of forward swaps has been deteriorating from a high of $13.1 billion in January as the central bank intensified its dollar selling to support the peso, one of the region's worst performing currencies this year. 

 

The peso has lost more than 12 percent so far in 2008, reversing its record last year as Asia's best performing currency, on risk aversion as investors moved out of emerging markets due to the deepening global credit crisis. 

 

Of the total $3.56 billion swap position, $3.28 billion had a one-month maturity and $279 million had a maturity of between one and three months, according to data from the central bank's website.

 

On Tuesday, traders said the central bank again sold dollars to prop up the local currency which fell to as low as 47.45 per dollar in intra-day trading, its weakest since May 2007, after U.S. lawmakers rejected a $700 billion bailout plan for the financial industry. 

 

Central bank governor Amando Tetangco said in a mobile text message to reporters monetary authorities were ready to infuse liquidity in the market when needed. 

 

Other central banks in Asia including South Korea, Thailand, India and Indonesia have also been selling dollars aggressively to boost their currencies. 

 

The Philippine central bank's currency swaps serve as a foreign exchange buffer for the monetary authority, as these represent additional foreign reserves the central bank would hold when the swap contracts were unwound.