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BSP net income falls on lower fee-based revenues

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Diwa Guinigundo-BSP-0823
File photo of Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa C. Guinigundo -- BW FILE PHOTO

By Melissa Luz T. Lopez,
Senior Reporter

THE CENTRAL BANK’S operations remained profitable as of end-September, although net income slipped from a year ago on the back of lower fee-based revenues.

The Bangko Sentral ng Pilipinas (BSP) reported a P9.97-billion net income for the first nine months, spelling a 28.7% decline from the P13.99 billion it made during the comparable period in 2016, data showed. Still, the amount picked up from the P8.87- billion bottom line reported at end-August.

The BSP’s latest unaudited income statement showed a 15.7% drop in gross revenues, which dipped to P48.15 billion from P57.12 billion it made as of end-September 2016.

Interest income totalled P42.35 billion, up by more than fifth from P34.7 billion a year ago. However, the increase was countered by a 74% slide in miscellaneous income, which reached P5.8 billion from P22.43 billion.

Miscellaneous income is derived from fees and penalties collected by from supervised financial institutions who fail to meet standards and deadlines imposed by the regulator.

The BSP reduced its operating costs to P50.93 billion, down by 1.7% from the P51.82 billion expenses incurred the year prior. Still, the amount surpassed the amount which the BSP raised from its core income sources.

Trading gains kept the BSP in profit as of September, as it booked a P12.79-billion profit from exchange rate fluctuations. The amount is bigger than the P8.7-billion gain from foreign currency trading tallied a year ago, according to central bank data.

The peso traded at the P51 level versus the greenback in September averaging at P51.0094 versus the greenback.

As the country’s monetary authority, the BSP conducts “tactical intervention” during the daily trading sessions to temper any sharp swings that may cause a sudden appreciation or depreciation of the peso.

BSP Deputy Governor Diwa C. Guinigundo has said a weaker peso actually spelled gains for the central bank, as the BSP has a lot of its investments expressed in the dollar.

The BSP is so far on track with ending the year in the black. If realized, this would mark the second straight year of profitability for the monetary authority, following its P17.81-billion net income in 2016 which ended six years of operating at a loss.

The central bank has been lobbying for the passage of amendments to the BSP Charter, which includes the infusion of an additional P150-billion capital and set up their own reserves to cushion foreign currency fluctuations. These reforms, however remain pending in Congress.

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