BSP income down, posts FX loses
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.