BSP profit up on forex gains and lower expenses

THE BANGKO SENTRAL ng Pilipinas (BSP) posted higher net income as of end-November, boosted by lower expenses and strong gains from foreign exchange (forex) movements, preliminary data showed.

Net income rose 4.05% to P118.2 billion from a year earlier, while revenue rose to P278.3 billion from P252.2 billion.

Interest income, the bulk of revenue, increased 1.04% to P223.5 billion, reflecting higher earnings from BSP holdings. However, miscellaneous income, which includes fees, penalties and other operating receipts, fell 49.7% to P28.7 billion.

Expenses declined 8.3% to P186.2 billion, driven largely by a 21.6% drop in interest payments to P121 billion. Other expenses, covering net trading losses and similar items, rose 33.5% to P65.3 billion.

Net income before foreign exchange gains or losses, taxes and capital reserves fell 12.4% to P65.9 billion from a year earlier. Foreign exchange gains that rose 35.5% year on year to P52.3 billion helped lift income.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., attributed the gains to high global gold prices and central bank rate cuts.

“These rate cuts could have led to additional investment gains on bond or fixed-income holdings, while record-high world gold prices also contributed,” he said.

The BSP’s key policy rate sits at a three-year low of 4.25% after a 225-basis-point (bp) reduction since August 2024. The US Federal Reserve has cut rates by 175 bps since September 2024, bringing its benchmark to 3.5%-3.75%.

Meanwhile, the central bank’s assets declined 1% to P7.972 trillion from a year earlier, with domestic security holdings falling 17.2% to P934.6 billion. International reserves, which make up the majority of assets, rose 2.7% to P6.491 trillion. Liabilities decreased 2.2% to P7.62 trillion, even as reserve money climbed 4.7% to P3.594 trillion. Other deposits not included in reserve money fell 16.5% to P1.1 trillion.

The BSP’s net worth increased 4.36% to P351.7 billion, supported by a 5.31% rise in surplus and reserves to ₱291.7 billion. These include unrestricted retained earnings, contingency funds and unrealized gains or losses from investments in government securities, stocks and other assets. — Katherine K. Chan