BSP net income up 250% in first 7 months

Published September 26, 2021, 10:00 PM

by Lee C. Chipongian

The Bangko Sentral ng Pilipinas (BSP) reported that its net income went up 250 percent year-on-year to P48.71 billion as of end July from P13.90 billion, on the back of higher interest and miscellaneous earnings.

BSP net income gets a boost from significant miscellaneous income

Based on the BSP preliminary and unaudited financial statement, total revenues increased 95.3 percent year-on-year to P107.75 billion from P55.16 billion same time in 2020.

Interest income from foreign investments and domestic securities reached P65.59 billion, 42 percent higher than P46.19 billion last year.

Miscellaneous income from trading gains/losses, fees, penalties and other operating income, among others, also surged 369.48 percent to P42.16 billion from P8.98 billion.

Total expenditures, in the meantime, rose 46.7 percent to P59.85 billion from P40.81 billion. BSP expenses include banknotes production and coin minting cost, as well as taxes and licenses fees. Interest expenses totaled P34.67 billion, up by 39 percent year-on-year from P24.92 billion while other expenses amounted to P25.17 billion from P15.88 billion.

The central bank also reported a modest P80 million net foreign exchange (FX) gain as of end-July, reversing a P32 million net FX loss in the same period last year.

The BSP had total assets of P7.936 trillion during the period, up by 20 percent year-on-year or from P6.613 trillion. Total liabilities also grew by 20.50 percent to P7.772 trillion from P6.449 trillion. Central bank assets are comprised of international reserves and income from its investments abroad while liabilities are mostly deposits and currency issues.

The BSP’s net worth of P164 billion was higher than end-June’s P156 billion but remained the same when compared to end-June 2020 which was also P164 billion.

The BSP’s capital remains at P50 billion. Its amended law or Republic Act 11211 (“An Act Amending Republic Act No. 7653, Otherwise Known as the ‘New Central Bank Act’, and for Other Purposes”) increased the BSP’s capitalization to P200 billion from P50 billion. This will be funded solely from the declared dividends of the central bank.

In March 2020 and in August this year, the BSP remitted a combined P36 billion to the government as dividends for anti-pandemic programs.

BSP Governor Benjamin E. Diokno said the latest dividends amounting to almost P16 billion represent 50 percent of its total net income for 2020 of P31.71 billion.

Diokno said that while the BSP is no longer mandated to remit dividends after its charter was revised in 2019, it will continue to do so for as long as the government needs additional funding in this “extraordinary time.”