Investing an additional P10 billion in the Bangko Sentral ng Pilipinas is seen as a good move considering the economic and financial stability that the Aquino administration stands to enjoy with a fully-capitalized monetary authority.
A senior Bangko Sentral ng Pilipinas (BSP) official said it was understandable that the national government wants to channel all available resources for the rehabilitation of areas hit by Typhoon “Yolanda” (international name: Haiyan).
But once fiscal authorities find money to spare, BSP Deputy Governor Diwa C. Guinigundo said paying for the central bank’s remaining P10 billion in capital would be a worthy investment.
“The government can be assured that if our capital is fully paid up, we can provide greater support in terms of doing our job to promote price and financial stability,” Guinigundo told reporters.
He conceded though that the government had the right to use taxpayer money as it sees fit.
“The National Government has the prerogative on what to do with our long delayed full capitalization,” he said.
Under its 1993 charter, the BSP, which is part of government but is still independent from the executive branch, should have P50 billion in capital.
The BSP was given an initial P10 billion—a small amount given its duty of maintaining price stability and keeping watch over the financial system—in capital after it was formed.
However, it wasn’t until the start of the Aquino administration, which used savings from more efficient spending, that the BSP received an extra P30 billion in capital. The government still owes the remaining P10 billion.
The BSP needs the money now more than ever after going through two consecutive years in the red.
In 2012, the central bank’s losses hit a record high of P95.38 billion, due mainly to the ballooning of funds parked by banks in the BSP’s special deposit accounts. This was triple the losses the BSP booked in 2011. The BSP is also expected to end 2013 with billions of pesos in losses.