Due to a double-digit decline in revenues, the Bangko Sentral ng Pilipinas (BSP) posted weaker net earnings from January to August.

Data from the BSP showed that the central bank’s net income fell by ₱18.7 billion to ₱86.9 billion in the first eight months, 17.7-percent lower than its profit in the same period last year of ₱105.6 billion.

During the eight-month period, the BSP’s revenues decreased by ₱33.2 billion, or 15.1 percent, to ₱187 billion from ₱220.2 billion a year ago. Although lower, expenses also dropped by four percent to ₱137.5 billion as of end-August from ₱143.2 billion last year.

Since January, the central bank’s interest income increased by 2.4 percent to ₱163.1 billion from ₱159.3 billion in the previous year.

Meanwhile, miscellaneous income plunged by ₱36.9 billion, or 60.6 percent, to ₱24 billion from ₱60.9 billion a year ago.

Interest income on international reserves, domestic securities, and miscellaneous income were the sources of the BSP’s revenues. Miscellaneous income includes trading gains or losses, fees, penalties, and other forms of operating income.

As for its spending, the BSP’s interest expenses dropped by 17.4 percent to ₱92.6 billion from ₱112.1 billion last year. Meanwhile, other expenses jumped by 44.4 percent to ₱44.9 billion from ₱31.1 billion in the first seven months of 2024.

The BSP’s foreign exchange (FX) gains rose 30.8 percent to ₱37.4 billion from ₱28.6 billion last year. These FX gains came from fluctuations in currency exchange rates related to the BSP’s foreign currency transactions.

As of end-August, the BSP’s total assets stood at ₱7.69 trillion, down one percent from ₱7.77 trillion in 2024. Data showed the decline was mainly driven by lower domestic securities and other assets.

Similarly, the BSP’s total liabilities decreased by 1.9 percent to ₱7.38 trillion from ₱7.52 trillion a year earlier. This was driven by decreases in deposits, domestic bills payable, and the reverse repurchase facility.

Since January, the BSP’s net worth climbed by 26.4 percent to ₱311.3 billion from ₱246.2 billion in the same period last year.

This increase was largely driven by surplus reserves, which jumped by more than a third to ₱251.3 billion from ₱186.2 billion a year earlier. The BSP’s capital, meanwhile, remained at ₱60 billion.

Despite the decline in the central bank’s miscellaneous income, Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort pointed to the higher FX gains and interest income, which came alongside the double-digit decline in interest expenses.

Ricafort noted this benefited from the BSP’s and the United States Federal Reserve’s (US Fed) recent monetary policy easing since last year.

“For the coming months, possible further cuts in Fed rates that could be matched by the BSP could lead to lower interest expenses,” Ricafort said. The BSP has so far reduced the key borrowing cost to 4.75 percent—1.75 percentage points (ppt) lower than the 6.5 percent prior to the inflation-targeting easing cycle.