Central bank net profit down at end-October
By Melissa Luz T. Lopez, Senior Reporter
THE CENTRAL BANK remained in the black as of end-October as a drop in gross revenues from a year ago due to lower fee-based incomes was offset by bigger trading gains.
The Bangko Sentral ng Pilipinas (BSP) posted a P12.38-billion net profit for the first 10 months, registering an 18.9% drop from the P15.26 billion it made during the same period in 2016.
Still, the amount improved from the P9.97 billion net income reported at end-September, according to data posted on the BSP’s web site.
Gains from currency trading propped up the central bank’s balance sheet during the period, as revenues declined by 14.4% from the prior year.
Interest income grew to P47.7 billion, up 22.8% from the P38.83 billion booked as of October 2016.
Meanwhile, collections from miscellaneous sources plummeted to P5.65 billion, barely a fourth of the P23.5 billion raised during the prior year.
Miscellaneous income is drawn from fees and penalties imposed on banks and other supervised financial firms who fail to meet certain standards and reporting deadlines imposed by the regulator.
On the other hand, the central bank kept its operating expenses lower at P55.82 billion, down 4.6% from the P58.49 billion it spent a year ago. However, this surpassed the amount the BSP raised from its core income sources.
Currency trading gains offset these losses as the central bank generated P14.92 billion from foreign exchange fluctuations, higher than the P11.43 billion it booked the previous year.
The peso traded above P51 versus the dollar during the first two weeks of November before returning to the P50 level to average at P51.0384 that month.
The BSP, as the country’s monetary authority, conducts “tactical intervention” during daily foreign exchange trading sessions in order to temper any sharp swings that may cause a sudden appreciation or depreciation of the peso.
Central bank officials have said that a weaker peso spells gains for the BSP as it has a lot of investments expressed in dollars.
The BSP is poised to maintain a second straight year in profit, following a P17.81 billion net income posted by the end of 2016. Last year’s recovery has been fuelled by trading gains worth P19.12 billion, which offset P1.2 billion in operational losses.
The 2016 performance also ended six straight years of losses for the central bank.
A proposal to infuse P150 billion as additional capital for the BSP remains pending before Congress, but has not been taken up by lawmakers since.
