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Business

BSP losses down to P19.21 B in Jan-July

Kathleen A. Martin - The Philippine Star

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) managed to cut its losses in the first seven months of the year due to  the  depreciation of the peso  and lower interest rates paid for  Special Deposit Accounts (SDAs).

The central bank incurred a net loss of P19.21 billion in the first seven months of the year, an improvement from last year’s net loss of P48.97 billion. 

BSP Deputy Governor Diwa C. Guinigundo said the improvement in the central bank’s bottomline was due to the weakening of the peso   and lower expenses as it cut interest rates on  SDA facility.

“The depreciation of the peso yielded some gains for the BSP and lower interest expense on account of lower interest rates on SDAs,” Guinigundo said.

Revenues during the seven-month period declined 6.7 percent to P39.27 billion from P42.09 billion a year ago.

Interest income slid 23 percent to P18.62 billion from P24.17 billion, while miscellaneous income grew 15.3 percent to P20.65 billion from P17.91 billion.

Expenses, meanwhile, fell 18 percent to P53.11 billion from P64.75 billion, pulled down by lower interest expenses. 

Interest expenses went down 31.5 percent to P37.12 billion from P54.18 billion, offsetting the 51.3 climb of other expenses to P15.99 billion from P10.57 billion.

At the same time, the BSP saw narrower losses from foreign exchange fluctuations at P3.66 billion from last year’s loss of P26.31 billion.

The BSP has cut interest rates on SDA by a total of 150 basis points this year to two percent. The reduction in the facility’s interest rates was made to flush out money from the SDA so it can find its way into other investments and projects that will benefit the economy.

The SDA was introduced by the BSP in 1998 as a tool to mop up excess liquidity in the system. However, falling interest rates have prompted investors to deposit their money in the SDAs instead.

The BSP last year prohibited foreign funds from being invested in the facility to curb speculative inflows into the financial system. Moreover, it also ordered the removal of 30 percent of singular investment management accounts (IMA) in the SDA by end-July, with the remaining 70 percent to be phased out by end-November.

BANGKO SENTRAL

BILLION

BSP

DEPUTY GOVERNOR DIWA C

GUINIGUNDO

INTEREST

SPECIAL DEPOSIT ACCOUNTS

YEAR

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