MANILA, Philippines–The central bank’s losses narrowed at the end of the third quarter as cash in special deposit accounts (SDA) fell well below year-ago levels, documents released this week showed.
However, if losses hold until December, the Bangko Sentral ng Pilipinas (BSP) would have been in the red for the fifth consecutive year, highlighting the need to afford more resources for the regulator.
At the end of September, the BSP lost P5.28 billion, 72.75-percent lower than the P19.38 billion it lost in the same period last year.
The BSP makes and loses money mainly as a result of its actions that aim to keep prices stable. Apart from the buying and selling of dollars in the market to ensure the peso’s stability, the BSP also acts as the bank of other banks, adjusting its deposit rates depending on how much cash monetary authorities deem the economy needs.
Revenues for the period were 22.2 percent lower at P36.18 billion from P46.5 billion in the same nine months of 2013.
This was mainly a result of lower earnings from “miscellaneous” items, which totaled P12.25 billion from P21.95 billion last year.
Expenses were lower by 23.3 percent during the nine-month period, but at P50.54 billion, were still more than the BSP’s revenues.
Lower interest expenses were consistent with the BSP’s move to force banks to remove individual investments from the BSP’s SDA window last year.
The SDA facility, one of the BSP’s main sterilization tools for liquidity in the economy, was restricted last year to keep banks from parking excess cash in central bank vaults to take advantage of relatively high yields.
After peaking at around P2 trillion early in 2013, the amount of money in SDAs have fallen to P1.16 trillion at the end of last week, latest data from the central bank showed.
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