Because of the pandemic and temporary suspension of some of its open market facilities, the Bangko Sentral ng Pilipinas (BSP) earned less in the second quarter, reducing its six-month net income to P13.714 billion or 54.1 percent lower than same time in 2019 of P29.883 billion.
The BSP has been reporting lower net income for the last two quarters, especially for the April to June months during the enhanced community quarantine. The second quarter net income fell by 77.32 percent from P16.753 billion in 2019 to P3.799 billion this year.
Based on initial data, the central bank’s net income in the second quarter was also lower than what was reported in the first quarter of P9.915 billion.
The BSP said the lower quarterly net income was mainly due to reduced interest income on reserves and miscellaneous income.
The BSP reported net foreign exchange (FX) losses of P441 million in the second quarter compared to a P2.021-billion net gain on these FX rate fluctuations in the first three months of 2020.
Last year, FX net gains amounted to P3.330 billion in the second quarter and P5.670 billion in the first quarter. The FX rate fluctuations come from its foreign currency transactions such as FX investments, servicing of maturing obligations and derivatives.
The central bank reported revenues of P20.786 billion in the second quarter, lower than P26.124 billion in the first quarter, for a total of P46.91 billion. The six-month revenues decreased by 28.18 percent from P65.316 billion same period in 2019. Total revenues came from interest income on reserves, domestic securities, and miscellaneous income.
Total expenditures were also down by 9.98 percent to P16.405 billion end-June from P18.225 billion end-March.
The BSP said the quarter-on-quarter drop in expenditures was due to lower interest expense on its term deposit facility and reverse repurchase facility which were temporarily suspended and reduced during the height of the lockdown months to encourage market participants to channel funds to loans or government securities.
“Furthermore, the reduced costs on banknote production and coin minting contributed to the overall decline in expenditures,” said the BSP.
For the six-month period, BSP expenses declined by 16.42 percent from P41.433 billion to P34.63 billion.
Preliminary data on the BSP’s balance sheet show that as of end-June 2020, its total assets amounted to P6.295 trillion, up by 15.7 percent from the previous quarter. It was also 24.3 percent more than year ago of P5.064 trillion. The BSP assets were mostly comprised of international reserves.
The BSP’s liabilities also increased by 15.6 percent to P6.130 trillion as of end-June compared to the first quarter’s P5.305 trillion. Total liabilities, which were deposits and currency issues, went up by 24.6 percent year-on-year from P4.920 trillion.
As for the BSP’s net worth, this rose by 21.3 percent to P164.5 billion end-June from P135.6 billion end-March. Compared to same time in 2019, it was higher by 14 percent from P144.3 billion.
The BSP in March has already advanced its dividend remittance to the government in the amount of P20 billion to help finance the Duterte administration’s COVID-19 pandemic response.
The advance dividends was computed as 87 percent of the BSP’s estimated total dividends for 2020.
The BSP still remitted dividends to the National Government despite that under its revised charter, which was approved last year as Republic Act No. 11211, it no longer was mandated to do so.