Manila Bulletin

BSP in­come down, posts FX loses

- By LEE C. CHIPONGIAN Business · Americas Stock Markets · MERVAL Index · Finance · Stocks & Markets · Investing · Investment Banking · Financial Markets · Latin America Stock Markets · Banking · Bangko Sentral ng Pilipinas · Nigeria

The net in­come of the Bangko Sen­tral ng Pilip­inas (BSP) is down by 35.03 per­cent as of end-Au­gust from R33.51 bil­lion same time last year to R21.77 bil­lion be­cause of lower in­ter­est in­come on re­serves.

The BSP also re­ported net losses of R2.94 bil­lion from for­eign ex­change (FX) rate uc­tu­a­tions dur­ing the pe­riod. This is a re­ver­sal of the R11.03-bil­lion net FX gains in Au­gust 2019. These are re­al­ized gains or losses from fluc­tu­a­tions in FX rates from the BSP’s for­eign cur­rency-de­nom­i­nated trans­ac­tions such as FX in­vest­ments, ser­vic­ing of ma­tur­ing obli­ga­tions and de­riv­a­tives.

Based on the lat­est unau­dited cen­tral bank state­ment on in­come and ex­pense, rev­enues from in­ter­est in­come on re­serves, do­mes­tic se­cu­ri­ties and mis­cel­la­neous in­come for Jan­uary-Au­gust came in at R71.56 bil­lion, it was 17 per­cent lower year-on-year from P86.20 bil­lion.

In­ter­est in­come, which is trad­ing gains/losses, fees, penal­ties and other op­er­at­ing in­come, dropped by 22.90 per­cent to R54.23 bil­lion from R70.34 bil­lion while mis­cel­la­neous in­come was up by 9.33 per­cent to R17.34 bil­lion from R15.86 bil­lion.

The BSP’s eight-month ex­penses fell by 15 per­cent year-on-year to R46.70 bil­lion from R54.97 bil­lion. In­ter­est ex­penses dipped by 2.85 per­cent to R28.93 bil­lion from R29.78 bil­lion while more ex­penses tagged as “oth­ers” de­creased by 29.45 per­cent to R17.77 bil­lion from R25.19 bil­lion.

The BSP has been re­port­ing lower net in­come for the last two quar­ters, es­pe­cially for the April to June months dur­ing the stictest com­mu­nity quar­an­tine. The sec­ond quar­ter net in­come fell by 77.32 per­cent while the rst quar­ter net in­come de­clined by 25 per­cent.

As of end-Au­gust, based on pre­lim­i­nary data on the BSP’s bal­ance sheet, its to­tal as­sets rose by 31 per­cent to R6.76 tril­lion from R5.16 tril­lion same pe­riod in 2019 mainly from the in­crease in its do­mes­tic se­cu­ri­ties hold­ings.

The BSP as­sets were mostly com­prised of in­ter­na­tional re­serves which to­taled R4.76 tril­lion, up 6.84 per­cent year-on-year from R4.46 bil­lion.

Dur­ing the pe­riod, be­cause the BSP has been pur­chas­ing gov­ern­ment se­cu­ri­ties as part of its COVID-19 re­sponse to pro­vide liq­uid­ity to the mar­ket, its do­mes­tic se­cu­ri­ties hold­ings in­creased by 388.68 per­cent to R1.22 tril­lion com­pared to just R225.49 bil­lion same pe­riod in 2019. The tally in­cludes the R300-bil­lion re­pur­chase agree­ment it en­tered into with the Bureau of the Trea­sury in March which was al­ready fully paid by Septem­ber 29. The BSP ex­tended an­other

R540-bil­lion pro­vi­sional ad­vances this month.

BSP li­a­bil­i­ties, in the mean­time, also in­creased by 31 per­cent to R6.59 tril­lion from R5.03 tril­lion end-Au­gust 2019. These are de­posits and cur­rency is­sues.

The cen­tral bank’s net worth rose to R171.31 bil­lion dur­ing the pe­riod from

R130.39 bil­lion same time last year.

It also re­ported a sur­plus/re­serves po­si­tion of

R121.31 bil­lion, more than the pre­vi­ous year’s R80.39 bil­lion.

In recog­ni­tion of its anti-pan­demic ac­tions and re­sponses to help the gov­ern­ment deal with the health cri­sis, in­clud­ing in­ject­ing the nan­cial sys­tem with

R1.9 tril­lion in liq­uid­ity, the BSP re­ceived from the Asian Banker the “Best Sys­temic and Pru­den­tial Reg­u­la­tor in Asia Paci c” award for 2020 this week.

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