By Melissa Luz T. Lopez, Senior Reporter
THE BANGKO SENTRAL ng Pilipinas (BSP) saw its bottom line surge fivefold during the first quarter largely on the back of gains from currency trading.
In its quarterly report, the central bank reported a P9.815-billion net income as of end-March, which jumped from the P1.664-billion profit it made during the comparable three-month period in 2017. The figure, however, is smaller compared to the P12.877- billion income booked during the fourth quarter.
Total revenues reached P14.918 billion from January to March, which is 18.8% higher than the P12.557 billion booked a year ago.
“The increased revenue was brought mainly by the rise in interest income on international reserves and domestic securities by approximately P3.4 billion and P0.4 billion, respectively,” the BSP said.
On the other hand, the BSP’s expenses reached P12.143 billion for the quarter, partly offsetting revenue collections although lower than the P15.588 billion in operating costs incurred the year prior.
The central bank attributed the reduced costs to lower interest expenses as well as reduced payments for taxes and licenses.
Meanwhile, gains from exchange rate fluctuations primarily boosted the BSP’s income during the first quarter as it reached P7.04 billion. This soared from the P4.695 billion it made from currency trading last year and is nearly triple the P2.688 billion booked during the previous quarter.
As the sole monetary authority, the BSP conducts “tactical intervention” during daily trading sessions in order to temper any sharp swings that may cause a sudden appreciation or depreciation of the peso. Officials have said that a weaker peso spelled gains for the BSP, as the central bank had a lot of investments expressed in dollars.
The peso averaged P52.0676 versus the greenback last March, coming from a P51.7856 rate in February and P50.2752 a year ago, according to BSP data.
The central bank is off to a strong start in sustaining another year in the black following the record P22.85 billion net income secured in 2017. If realized, this would mark the third straight year in profit.
The BSP has been lobbying for a proposed law that will infuse P150 billion as additional capital for the central bank in order to boost operations.
“We hope Congress will pass before the end of 2018 the proposed legislation amending the BSP charter as this will pave the way for an even stronger banking industry. This will help BSP fulfill its mandates more effectively and will ensure the banking system remains a pillar of strength for the Philippine economy amid evolving trends and external challenges,” BSP Governor Nestor A. Espenilla, Jr. said in a recent statement.
However, the proposal remains pending at the legislative mill.