BSP books record profit
THE BANGKO SENTRAL ng Pilipinas (BSP) booked a record income in October on the back of a surge in revenues and foreign exchange gains coupled with lower operating costs, keeping it on track to remain in the black for 2016.
The central bank incurred a P15.26- billion net profit as of end- October, reversing a P4.41billion net loss during the comparable period in 2015, according to latest BSP data.
October’s net income was the highest end-month tally thus far based on available BSP data.
The month’s bottom line also marks the BSP’s sustained profitable operations since February, when it recovered to a P230million net income coming from January’s P60- million net loss, putting the central bank on track to reverse a P3.9-billion loss incurred at end-2015.
Total revenues jumped by 30.2% to P62.33 billion from P47.87 billion during the same 10- month period a year ago, as both interest income and miscellaneous fees posted double-digit expansions.
Profits from interest payments grew 21% to reach P38.83 billion, coming from P32.08 billion incurred a year prior.
Meanwhile, miscellaneous income also hit P23.5 billion, a 48.8% jump from the P15.79 billion tallied in October 2015, data showed.
The central bank also booked a higher profit from foreign currency gains amounting to P11.43 billion, coming from P7.63 billion shored up from fluctuations in the exchange rate during the same period in 2015.
The peso traded at seven-year lows versus the dollar that month, amid heightened uncertainty over the timing of the second round of a rate hike in the United States.
As the country’s sole monetary authority, the BSP sometimes steps in during daily currency trading to temper any sharp movements that may cause a sudden appreciation or depreciation of the peso.
BSP Deputy Governor Diwa C. Guinigundo earlier said that a weaker peso meant gains for the central bank while a stronger peso spelled trading losses, as the BSP held a lot of its investments in dollars. The central bank has revived its proposal to put up its own reserves to cushion foreign currency fluctuations under its proposal to update Republic Act 7653 or the New Central Bank Act, which is being discussed by Congress.
On the other hand, the BSP managed to cut its operating expenses by some 2.3%, going down to P58.49 billion from P59.9 billion last year.
The BSP has been operating at a loss since 2010. Losses peaked at P95.38 billion at end-2012 before it went down consistently for the succeeding years.
The monetary authority is likewise seeking an increase in its authorized capital to P200 billion from P50 billion under the proposed Charter amendments, which if granted would allow the BSP to take on more activities and investments to boost its operations.