BSP net loss widens as of end-July
THE CENTRAL bank’s losses widened in the seven months ending July as regulators continued to spend more on interest than what was being earned from its various investments, data released this week showed.
In January to July, the Bangko Sentral ng Pilipinas (BSP) posted a net loss of P3.55 billion, higher than last year’s losses of P3.17 billion.
The end-July result showed a reversal of fortunes for the BSP, which booked a P1-billion profit in the second quarter of the year.
The BSP said total revenues rose by 25 percent year-on-year to P34.97 billion during the seven-month period. This was a reversal from the 29.1-percent decline in gross earnings posted in January to July of 2014.
Bulk of the BSP’s earnings came in the form of interest income, totaling P21.47 billion. Miscellaneous income, which accounts for regulatory fees paid by banks, among others, stood at P13.5 billion.
Despite the improvement on its top line, the central bank’s expenses rose as well, albeit at a slower pace. Total expenses reached P41.69 billion, up 7.5 percent year-on-year at the end of July. In the same seven months last year, the BSP’s expenses declined by 27 percent.
These translated to a loss of P6.72 billion for the BSP in the seven months, before taxes and foreign exchange fluctuations. These losses were trimmed, thanks to a gain of P3.17 billion as a result of foreign exchange movements.
Since 2010, the BSP’s losses have totaled P224.47 billion. The bleeding peaked in 2012, when the BSP lost P95.38 billion, the highest annual loss in the central bank’s history.
These losses were caused mainly by the buildup in the amount of cash stashed in special deposit accounts (SDAs), one of the main tools the BSP uses to siphon cash from the economy.
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