The Bangko Sentral ng Pilipinas (BSP) reported a lower net income in 2023 of P25.53 billion, down by 59.9 percent from P63.73 billion in 2022 due to higher expenses.
Based on the latest BSP data, revenues totaled P212.76 billion last year, up 50.8 percent compared to P141.08 billion in 2022.
The central bank, one of the mandated seed funders to the Maharlika Investment Corp. (MIC), spent more last year with expenses increasing by 68.3 percent to P244.21 billion versus P145.13 billion in 2022.
BSP revenues came from its interest income from international reserves and domestic securities. Last year, interest income rose 29 percent to P197.92 billion from P85.63 billion.
Meanwhile, miscellaneous income improved by the end of 2023 to P14.84 billion compared to a P12.12 billion contraction in 2022. Miscellaneous income includes trading gains/losses, fees, penalties, and other operating income, among others.
Under expenditures, BSP’s interest expenses totaled P168.29 billion in 2023, up 96.5 percent from P85.63 billion of the previous year.
The BSP pays high costs for its banknotes production and coin minting cost, as well as taxes and licenses fees, and from its open market operations.
Last year, the central bank’s foreign exchange or FX gains declined by 15.7 percent to P57.02 billion compared to P67.66 billion in 2022. FX gains are realized gains from fluctuations in FX rates arising from BSP’s foreign currency-denominated transactions.
The BSP reported total assets of P7.563 trillion in 2023, it was 4.4 percent higher than 2022’s P7.247 trillion. The increase was due to higher international reserves of P5.707 trillion and domestic securities of P1.277 trillion.
Total liabilities, on the other hand, increased by four percent to P7.42 trillion compared to P7.136 trillion previously. In a report, the BSP said “this was driven by higher currency in circulation, obligations from reverse repurchase facility and revaluation of foreign currency accounts.”
The BSP’s net worth as of the end of last year stood at P142.73 billion, up from P111.02 billion in 2022. The net worth was boosted by surplus reserves amounting to P82.73 billion which was higher than 2022’s P51.02 billion.
The financial institution's capital remains at P60 billion only, short of the P200 billion it had to have under the BSP Charter as amended in 2019.
For decades since the BSP was established in 1993 from the ashes of the bankrupted Central Bank of the Philippines, the BSP only had P10 billion in capitalization, short of the P50 billion promised under the first BSP law. The entire P50 billion was given to the BSP in full 20 years later, in 2013.
In 2019, the amended BSP Charter raised its capitalization from P50 billion to P200 billion. The plan was to build up BSP’s capitalization by not remitting dividends to the National Government (NG) and keeping the money to fund its price and financial stability operations.
However, when the Marcos administration came up with the Maharlika Investment Fund (MIF) which will be managed by the MIC, the MIF law mandated the BSP to divert its dividends as seed money to the sovereign wealth fund.
This postpones the buildup of the BSP capitalization but central bank officials believe they can afford the delay.
Based on the MIF law, which created the MIC, the BSP is mandated to remit 100 percent of its dividends to the government as seed cash. After the first two years of 100 percent dividend payout to the NG, the BSP, in the succeeding years, will remit 50 percent of its declared dividends to the MIC while the remaining 50 percent will go to the government until the increase in the BSP capitalization has been fully paid.