Data showed the net income of the central bank amounted to P10.95 billion from January to July, a complete reversal of the P3.55 billion losses booked in the first half of last year.
MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) recorded profits in the first seven months on the back of higher revenues, lower expenses as well as higher gains on its foreign exchange operations.
Data showed the net income of the central bank amounted to P10.95 billion from January to July, a complete reversal of the P3.55 billion losses booked in the first half of last year.
The central bank’s revenues jumped 45.02 percent to P45.02 billion from P34.97 billion as interest earnings rose 26 percent to P27.06 billion from P21.47 billion, while miscellaneous income coming from trading gains from domestic and foreign currency securities jumped 32.9 percent to P17.96 billion from P13.51 billion.
Expenses slipped 2.7 percent to P40.57 billion in the first seven months from P41.69 billion in the same period last year. Interest expense on loans payable and other foreign currency deposits as well as cost of minting or printing of currencies declined 7.6 percent to P26.17 billion from P28.31 billion.
Gains on foreign exchange fluctuations amounted to P6.5 billion from January to July as against losses amounting to P3.55 billion which was incurred in the same period last year.
The BSP books gains or losses from fluctuations in foreign exchange rates on matured, sold, paid and/or exchanged or settled foreign exchange assets and liabilities.
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The BSP managed to trim its losses by 57.5 percent to P4.3 billion last year from P10.11 billion in 2014. Revenues increased 14 percent to P56.75 billion from P49.78 billion while expenses went up by 5.7 percent to P72.78 billion from P68.87 billion.
Gains on foreign exchange fluctuations surged 29 percent to P11.55 billion last year compared with P8.95 billion in 2014.
The primary objective of the BSP 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 of the peso against other currencies.
The BSP has been incurring heavy financial losses since 2010 in its efforts to temper currency fluctuations that could be destabilizing. In 2012, the BSP booked a record loss of P95.38 billion as it booked losses amounting to P50.4 billion on foreign exchange fluctuations.
