BSP income doubles to P67 billion in 11 months

MANILA, Philippines — The earnings of the Bangko Sentral ng Pilipinas (BSP) doubled to P67.08 billion from January to November last year compared to a year-ago level of P34.51 billion on higher trading gains and operating income as well as massive gains from foreign exchange transactions.

Data from the central bank showed total revenues mostly comprised of interest income on foreign investments, government securities and Treasury bonds went up by 42.1 percent to P154.14 billion during the 11-month period last year from P108.5 billion in the same period in 2020.

The BSP said interest income soared by 33.6 percent to P105.05 billion from P77.86 billion, while miscellaneous income including trading gains or losses, fees, penalties and other operating income, among others jumped by 63.5 percent to P50.1 billion from P26.29 billion.

The central bank’s total expenses increased by 43.4 percent to P97.74 billion from January to November last year compared to 68.14 billion in the same period in 2020 as interest expenses grew by 32.1 percent to P55.54 billion from P26.11 billion.

During the 11-month period, the BSP booked a net gain of P10.71 billion from foreign exchange rate fluctuations, reversing the net loss of P5.67 billion recorded in the same period in 2020.

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. Its participation 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, shedding more than six percent to end 2021 at 50.999   from 48.023 to $1 in 2020.

The local currency has been depreciating heavily since the hawkish tilt by the US Federal Reserve in June last year and as the country continues to struggle to contain the pandemic.

The earnings of the BSP plunged by 25.3 percent to P31.71 billion in 2020 from a record high of P45.81 billion in 2019 after it booked a P5.78 billion loss from foreign exchange rate fluctuations.