BSP profit hits record high of P83.8 B

Gains from foreign exchange transactions boosted the earnings of the Bangko Sentral ng Pilipinas (BSP) to a record P83.82 billion last year, more than double the P34.72 billion profit recorded in 2021.

Preliminary data showed the central bank booked a net gain of P83.86 billion from forex rate fluctuations last year, up from P59.99 billion recorded the previous year.

The BSP books gains or losses from fluctuations in forex rates on matured, sold, paid and exchanged or settled forex assets and liabilities. Its participation in the forex market is limited to temper sharp fluctuations in the exchange rate.

The peso has depreciated by as much as 15.7 percent to an all-time low of 59 to $1 in October from the end-2021 level of 50.999. Just like other currencies, the peso continues to weaken against the US dollar due to the hawkish Federal Reserve, the impact of Russia’s invasion of Ukraine on global oil and commodity prices, and rising interest rates in the country.

After a series of aggressive rate hikes delivered by the BSP and its active intervention in the forex market, the local currency weakened by 9.3 percent to end 2022 at 55.755 to $1 from 50.999 in end-2021.

Total revenues, mostly comprised of interest income on foreign investments, government securities and treasury bonds, retreated by 14.9 percent to P141.3 billion from P165.89 billion.

Interest earnings jumped by 33 percent to P153.22 billion from P115.45 billion.

Miscellaneous activities, including trading gains or losses, fees, penalties and other operating income, among others, yielded a net loss of P11.91 billion last year, reversing the P50.44 billion gains booked in 2021.

Total expenses surged by 28.8 percent P140.79 billion from P109.33 billion, driven by the 41.9 percent jump in interest expenses to P85.63 billion from P60.34 billion as well as the 12.6 percent rise in other expenses to P55.16 billion from P48.99 billion.