The Bangko Sentral ng Pilipinas incurred a net loss of nearly P20 billion in the first quarter as its efforts to mop up excess liquidity in the economy and to temper a potentially sharper rise in the value of the peso against the dollar jacked up its expenses.
The central bank’s net loss in the first three months of P19.77 billion was 4 percent lower than the P20.62 billion recorded in the same period last year, official documents showed.
The BSP’s revenues reached P17.22 billion while expenditures and losses from foreign exchange operations hit P36.99 billion.
The revenues actually grew nearly 6 percent year on year, but this was not enough to cover the jump in expenditures.
The BSP has been losing during the past two years. Officials have cited the significant expenses needed to ensure that liquidity circulating in the economy remained manageable and did not reach levels that could lead to worrisome inflation.
In its bid to maintain an adequate level of available money, the BSP accepts deposits from banks and pays interests on these funds through its overnight borrowing and special deposit account (SDA) facilities. The SDA deposits alone are estimated at P1.8 trillion.
The documents showed that interest expenses accounted for P24.49 billion of the central bank’s total expenditures for the three months to March. This was up 17 percent from P20.85 billion in the same period last year.
Officials also pointed to the central bank’s foreign exchange operations, under which it buys dollars from the market to temper what could have been a much sharper appreciation of the peso.
The losses from foreign exchange operations amounted to P8.69 billion, lower by 31 percent than the P12.59 billion a year ago.