BSP profit more than triples to P42.7 billion

MANILA, Philippines — Earnings of the Bangko Sentral ng Pilipinas (BSP) more than tripled to P42.69 billion in January to November last year due to gains from foreign exchange fluctuations.

Revenues rose 3.9 percent to P61.35 billion.

 Interest income on international reserves and domestic securities jumped 31.1 percent to P69.56 billion, wiping out the P8.1 billion losses from miscellaneous activities.

On the other hand, expenses declined 7.8 percent to P56.28 billion due mainly to lower interest expenses and taxes and licenses.

The central bank also shelled out P8.44 billion for income tax expense in the first 11 months of 2018.

Net income before gains on foreign exchange fluctuations, income tax expense, and capital reserves amounted to P5.08 billion, reversing the P1.98 billion net loss incurred a year ago.

Gains on foreign exchange fluctuations surged 243.7 percent to P52.76 billion. The gains were realized from servicing of matured foreign exchange obligations as well as the maturity of derivative instruments.

This also represents realized gains 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.

After emerging as the third worst performing currency in the region, the local currency closed at 52.58 to $1 or 5.3 percent weaker than the end-2017 level of 49.93 to $1.

The peso hit its lowest level in 13 years at 54.325 to $1 last Sept. 26.

BSP books gains or losses from fluctuations in foreign exchange rates on matured, sold, paid and exchanged or settled foreign exchange assets and liabilities.

On 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 posted an all-time high net income of P23.51 billion in 2017, up 34.3 percent.  It gained P15.48 billion from foreign exchange fluctuations.