The Bangko Sentral ng Pilipinas (BSP) reported a lower net income of P34.533 billion in 2020, down 25.31 percent from P46.239 billion in 2019.
Based on the latest central bank statement of income and expense, BSP’s net foreign exchange (FX) losses continued last year amid the pandemic at P5.799 billion versus net gains of P14.725 billion in 2019. The BSP’s realized losses or gains come from FX rate fluctuations that BSP incurs from its foreign currency transactions such as FX investments, servicing of maturing obligations and derivatives.
As part of its COVID-19 pandemic response, the BSP has advanced its dividend payments to the National Government (NG) last March 2020 in the amount of P20 billion. This is despite the fact that BSP, under the amended 2019 BSP Charter, is no longer mandated to remit dividends to the NG.
Last year, the central bank’s revenues fell by 2.83 percent to P118.222 billion versus P121.676 billion previously. Net interest income totaled P85.433 billion compared to P100.415 billion in 2019.
Expenses, however, decreased by 10.93 percent to P77.789 billion from 87.334 billion. Interest expenses rose to P46.435 billion from P44.688 billion on account of higher interests paid on its overnight deposit facility (ODF) and the term deposit facility.
As of end-December 2020, the BSP’s total assets stood at P7.071 trillion, up by 39.1 percent from 2019’s P5.084 trillion as its domestic securities holdings surged to P1.380 trillion from a mere P226 billion pre-pandemic due to purchases to supply liquidity in the financial system. Foreign borrowings also increased the country’s international reserves’ assets to P5.249 trillion from P4.434 trillion in 2019.
Total liabilities also increased by 39.7 percent to P6.9 trillion from P4.938 trillion previously, with higher currency issues and deposits. The deposits were mostly placements in reserve deposits, deposits from ODF, and deposits from NG.
The BSP has done plenty of heavy lifting to cushion the impact of the pandemic on the economy and financial system. “The BSP implemented prompt and decisive policy actions and a series of relief measures to ease monetary conditions and enhance financial system liquidity. These actions aim to cushion the impact of the crisis, shore up market confidence and support economy activity amid the pandemic,” said the BSP.
At the end of the first pandemic year, the BSP’s net worth stood at P170.9 billion, up by 17.4 percent from P145.6 billion posted in 2019.
“The BSP did the heavy lifting in terms of ensuring ample liquidity in the financial system and providing regulatory relief to banks,” BSP Governor Benjamin E. Diokno said after injecting P2 trillion in money supply as pandemic relief measure. “In turn, we expect banks to help their hard-hit customers cope with the crisis as well.”