BSP earnings steady at P17.6 B in 4 months

MANILA, Philippines — The net income of the Bangko Sentral ng Pilipinas (BSP) was  almost steady at P17.58 billion in the first four months compared to the P17.55 billion recorded in the same period last year amid the sharp rise in revenues and expenses.

The central bank’s total revenue – comprised of interest income on foreign investments, government securities and treasury bonds – surged by 42.9 percent to P36.64 billion from P25.64 billion.

Its total expenditures jumped by 48.5 percent to P25.13 billion from January to April compared to P16.92 billion in the same period last year.

Gains on foreign exchange fluctuations and interest expense fell by 31.3 percent to P6.07 billion from P8.84 billion. The gains were realized from servicing of matured foreign exchange obligations as well as the maturity of derivatives instruments.

This also represents realized gains arising from foreign currency-denominated transactions of the BSP, including rollover or re-investments of matured foreign exchange investments with foreign financial institutions and foreign exchange -denominated government securities.

The BSP books gains or losses from fluctuations in foreign exchange rates on matured, sold, paid and exchanged or settled foreign exchange assets and liabilities. It participates in the foreign exchange market to temper sharp fluctuations in the exchange rate.

On such occasions of excessive movements, the BSP enters the market mainly to maintain order and stability. When warranted, it also stands ready to provide some liquidity and ensure that legitimate demands for foreign currency are satisfied.

The BSP booked an all-time high net income of P39.8 billion last year, 69 percent higher than the P23.5 billion recorded in 2017. It gained P53.1 billion from foreign exchange fluctuations.