BSP profit surges to P1.66 B in Q1

The Bangko Sentral ng Pilipinas (BSP) continued to book higher earnings in the first quarter of the year, driven by robust gains on foreign exchange rate fluctuations and lower expenses.

Preliminary data from the central bank showed its net income surged to P1.66 billion from January to March, more than 10 times the P156-million profit earned in the same period last year.

The BSP recorded a foreign exchange gain of P4.69 billion, up 27.8 percent year on year. This represents realized gains arising from foreign currency-denominated transactions, including rollover or re-investments of matured foreign exchange investments with foreign financial institutions and foreign exchange -denominated government securities.

Revenues, however, slipped 4.6 percent to P12.57 billion even as expenses declined by 6.5 percent to P15.59 billion. The drop in expenses was mainly due to lower interest expense on overnight deposit facility as well as cost of minting or printing of currency.

The gains were also realized from servicing of matured foreign exchange obligations as well as the maturity of derivatives instruments.

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.

BSP’s primary objective is to promote price and financial stability conducive to balance and sustainable economic growth. It also seeks to maintain monetary stability and the convertibility of the peso by performing a wide range of functions involving money, banking and credit in the performance of this mandate for stabilization.

The central bank registered an all-time high profit of P17.02 billion last year, a complete reversal of the P4.45 billion loss incurred in 2015.

It lost P59.04 billion and P33.69 billion in 2010 and 2011, respectively, amid efforts to temper currency fluctuations following the global financial crisis.

In 2012, the BSP booked a record loss of P95.38 billion, weighed down by P50.4 billion in losses on foreign exchange fluctuations. The losses declined steadily to P17.51 billion in 2013, P9.86 billion in 2014, and P4.45 billion in 2015.