By Eileen A. Mencias

The Bangko Sentral will roll over some foreign loans, especially the $500-million short-term credit it tapped from the Bank for International Settlements and a $600-million gold-backed facility, to conserve foreign reserves, a senior monetary official told reporters.

The official, who spoke on condition of anonymity, said the rollover would prevent a weakening of the external accounts and avert a huge deficit in the country?s balance of payments position.

The central bank first tapped the BIS loan in June to preserve foreign reserves after investors started pulling out of emerging markets because of risk aversion arising from the US sub-prime crisis.

In October, the central bank tapped a $600-million gold backed loan that raised short-term liabilities to $1.52 billion from $921 million in September. The central bank also tapped two $200-million loans in August and September.

The Philippines has $2.4 billion in maturing obligations in February and March, including the national government?s $1.3-billion global bond issue.

Central bank?s liabilities, including BIS and gold-backed loans, stood at $1.52 billion at the end of January,

Declining exports, slowing remittances and the bleak outlook on investments will likely weaken the country?s balance of payments position this year.

The central bank registered an increase in its pledged assets to $1.627 billion at the end of December. Gold-backed loans resulted in an increase in the central bank?s pledged assets, which are included in reserves, as gold isused as a security for borrowing.

The Philippines posted a huge surplus of $1.73 billion in the balance of payments in January, boosted by proceeds from foreign loans and power privatization. It was also a reversal of the $275-million deficit registered in December last year.

The International Monetary Fund expects the Philippines to book a $500-million deficit in the balance of payments position amid a slow remittance growth. The IMF, however, expects the current account, which includes exports, imports and remittances, to post a surplus.

The central bank is currently reviewing its assumptions on the balance of payments position for the year.