^

Business

BSP trims losses to P4.4 B in 10 months books gains from forex swings

Lawrence Agcaoili - The Philippine Star

MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) trimmed its losses in the first 10 months of last year as it continued to book gains on foreign exchange fluctuations.

 According to official data on the BSP website, the central bank’s net losses amounted to P4.41 billion from January to October, 11.8 percent down from P5 billion the previous year.

 Revenues jumped 12.9 percent to P447.87 billion from P42.39 billion, while expenses rose 5.2 percent to P59.9 billion from P56.92 billion.

 The BSP booked gains on foreign exchange fluctuations amounting to P7.63 billion during the period, although a fifth lower compared with P9.54 billion in 2014.

  Gains or losses from fluctuations in foreign exchange rates are recorded from matured, sold, paid and/or exchanged or settled foreign exchange assets and liabilities.

  Broken down, bulk of revenues came from interest earnings, which rose 17.7 percent to P32.08 billion. Meanwhile, miscellaneous income from reduced trading gains from domestic and foreign currency securities reached 15.79 billion, up 4.2 percent.

 On expenditures, interest expense on loans and other foreign currency deposits, including cost of minting or printing of currencies increased 6.6 percent to P40.75 billion in the first 10 months last year.

 The BSP’s primary objective is to promote price and financial stability conducive to balanced and sustainable economic growth. It also seeks to maintain monetary stability and the convertibility of the peso by performing a wide range of functions involving money, banking and credit in the performance of this mandate for stabilization.

 The central bank is faced with the challenge of dealing with the consequences of strong foreign exchange inflows that have resulted in strengthening the peso against other currencies.

As a result, it has been incurring heavy financial losses since 2010 as it moved to temper destabilizing currency fluctuations.

 In 2012, the BSP’s net loss hit a record P95.38 billion. 

The losses are incurred when the peso strengthens, resulting in foreign exchange revaluation losses for BSP since the value of its foreign exchange holdings falls below their acquisition cost.

 The central bank also records losses when it buys foreign exchange paid in pesos to mop up excess liquidity in the system. Having more money in circulation could lead to higher inflation, adversely affecting exporters, overseas workers or domestic producers.

 

vuukle comment

BANGKO SENTRAL

BILLION

BSP

EXCHANGE

FLUCTUATIONS

FOREIGN

GAINS

LOSSES

NBSP

PERCENT

PILIPINAS

Philstar
x
  • Latest
  • Trending
Latest
Latest
abtest
Are you sure you want to log out?
X
Login

Philstar.com is one of the most vibrant, opinionated, discerning communities of readers on cyberspace. With your meaningful insights, help shape the stories that can shape the country. Sign up now!

Get Updated:

Signup for the News Round now

FORGOT PASSWORD?
SIGN IN
or sign in with