BSP income steady at P29.9 B in H1

MANILA, Philippines — Earnings of the Bangko Sentral ng Pilipinas (BSP) managed to grow by 1.5 percent to P29.88 billion in the first half from P29.45 billion in the same period last year despite higher expenses and taxes.

Data released by the central bank showed total revenues mostly comprised of interest income on foreign investments, government securities and treasury bonds jumped by 76.2 percent to P65.32 billion from P37.08 billion.

Interest income surged by 48.3 percent to P53.22 billion from P35.88 billion, while miscellaneous income including trading gains or losses, fees, penalties and other operating income, among others amounted to P12.1 billion or more than 10 times last year’s P1.19 billion.

The BSP said its total expenditures zoomed by 42.3 percent to P41.43 billion from January to June compared to P29.12 billion in the same period last year. Interest expense surged by 65 percent to P21.49 billion from P13.02 billion.

Gains on foreign exchange fluctuations plunged by 58.1 percent to P9 billion from P21.51 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’s participation in the foreign exchange market is limited 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.