BSP earnings soar to P48.7 billion

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) earned P48.71 billion from January to July, more than 3.5 times the P13.9 billion it earned in the same period last year, on higher trading gains and operating income.

Revenues mostly comprised of interest income on foreign investments, government securities and Treasury bonds almost doubled to P107.75 billion in the first seven months from a year-ago level of P55.16 billion.

Miscellaneous income including trading gains or losses, fees, penalties and other operating income, among others reached P29.52 billion or almost 4.7 times the P8.98 billion recorded in the same period a year ago.

Likewise, interest income jumped by 42 percent to P65.59 billion in the seven-month period from P46.19 billion a year ago.

Total expenses of the BSP surged by 46.7 percent to P59.85 billion from January to July compared to P40.81 billion in the same period last year as interest expenses zoomed by 39 percent to P34.67 billion from P24.92 billion.

During the period, the BSP booked a net gain of P800 million from foreign exchange rate fluctuations arising from servicing of matured foreign exchange obligations as well as the maturity of derivatives instruments as well as rollover or re-investments of matured foreign exchange investments with foreign financial institutions and foreign exchange-denominated government securities.

The amount was a reversal of the net loss of P320 million recorded from January to July last year.

The BSP reports 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 is limited to temper sharp fluctuations in the exchange rate.

After emerging as one of the strongest currencies in the region, gaining more than five percent to close at 48.023 to $1 last year, the peso is now one of the worst performing currencies as it continues to flirt between the 49 to 50 per $1 level.

The local currency has been depreciating heavily since the hawkish tilt by the US Federal Reserve in June and as the country continues to struggle to contain the pandemic with the emergence of highly transmissible Delta variant.

The earnings of the BSP plunged by 25.3 percent to P31.71 billion last year from a record P45.81 billion in 2019 after it incurred a P5.78 billion loss from foreign exchange rate fluctuations.