The Bangko Sentral ng Pilipinas (BSP) posted a higher net income of P109.7 billion at the end of the third quarter, up 392 percent from P22.3 billion in the same period last year, due to increased interest income from international reserves.
According to the BSP's statement of income and expense as of end-September, revenues totaled P244.3 billion, a 55.7 percent increase compared to P156.9 billion in the same period of 2023.
BSP revenues are derived from interest income on international reserves and domestic securities, as well as miscellaneous income.
As of end-September, interest income amounted to P179.1 billion, 24.2 percent higher than the previous year’s P144.2 billion.
Miscellaneous income also rose significantly, by 409 percent to P65.2 billion from P12.8 billion the previous year. This category includes trading gains/losses, fees, penalties, and other operating income.
Meanwhile, the BSP reported decreased expenses during the nine-month period, totaling P161.8 billion, down 11.3 percent from P182.4 billion in the previous year.
Interest expenses totaled P125.6 billion, a slight increase of 1.37 percent compared to P123.9 billion the previous year. Other expenses, primarily stemming from trading losses, amounted to P36.2 billion, down from P58.4 billion the previous year.
For the third quarter (July to September), BSP interest expenses accounted for 74.1 percent of its total expenditures. Overall, the BSP’s net income for the third quarter declined by 64 percent to P24.2 billion, compared to P43.2 billion in the second quarter.
This lower income in the third quarter was due to losses from foreign exchange (FX) rate fluctuations of P400 million, a reversal from a gain of P24 billion in the second quarter.
For the first three quarters ending in September, the BSP reported FX gains of P27.2 billion, lower than the P47.8 billion recorded at the end of September 2023. FX gains are realized gains from fluctuations in exchange rates arising from the BSP’s foreign currency-denominated transactions.
At the end of the third quarter, the BSP had total assets of P8.081 trillion, up 10.2 percent from P7.33 trillion in 2023. This increase was largely driven by higher international reserves, which reached a record high of $112.7 billion at the end of September this year.
The central bank’s liabilities also increased by 8.6 percent to P7.813 trillion from P7.193 trillion in 2023. This rise is attributed to higher government deposits from treasury and reverse repurchase (RRP) facility placements by banks and BSP counterparties. BSP liabilities also include currency in circulation and obligations from RRP and revaluation of foreign currency accounts.
The BSP registered a net worth of P267.8 billion during the period, 95.5 percent higher than the previous year’s P137 billion. This was bolstered by surplus reserves amounting to P207.8 billion, a 170 percent increase from P77 billion the previous year.
The BSP’s capital remains at P60 billion, falling short of the P200 billion mandated by the BSP Charter as amended in 2019. However, the law creating the Maharlika Investment Fund requires the BSP to divert its dividends as seed money to the sovereign wealth fund. This postpones the increase of the BSP's capitalization, but central bank officials believe they can afford the delay.
A BSP report stated that its financial condition remained strong, with international reserves comprising 77.6 percent of the central bank’s total assets.