Bangko Sentral losses up 84% to P6.65 billion

The Bangko Sentral ng Pilipinas (BSP) has reported it is still financially in the red as its losses mounted by 84 percent from January to February this year. Based on its unaudited financial statement, the BSP incurred a net loss of P14.58 billion from January to February this year, or P6.65 billion higher than the P7.93-billion net loss it booked in the same period in 2010. “The shortfall was due mainly to trading losses incurred during the period compared to the trading gains realized in January to February 2010," the BSP said. The central bank's total revenues plunged 45.2 percent to P9.31 billion from P16.97 billion. The BSP’s miscellaneous income declined by P7 billion on trading losses from foreign exchange transactions, while interest income dipped by P593 million largely due to reduced interest earnings from domestic securities and loans and advances. Losses from foreign exchange rate and price fluctuations eased by 39.9 percent to P8.2 billion from P13.65 billion. Republic Act 7653, or the New Central Bank Act of 1993, mandates the BSP to adhere to a market-oriented foreign exchange rate policy, that the BSP’s role is principally to ensure orderly conditions in the market. The bank shall then intervene in the market when the peso appreciates or depreciates sharply to smooth out the movements of foreign exchange. Expenditures up 39.4% The bank’s unaudited results showed that total expenditures rose by 39.4 percent to P15.68 billion from P11.25 billion, largely due to a 45.2-percent rise in interest expenses in the special depository accounts (SDA) facility. Similarly, total taxes and licenses remitted to the national government amounted to P290 million, down P128 million from P418-million. Still, the regulator’s assets rose by 23.7 percent to P3.26 trillion from P2.63 trillion. Its liabilities also surged 29.7 percent to P3.11 trillion from P2.4 trillion. The year-on-year expansion of BSP’s assets was largely because of the steady build-up in international reserves, which accounted for over 85 percent of its total assets, according to the bank. The gains from its investment income abroad and foreign exchange purchases due to strong capital inflows largely underpinned the 31.8-percent growth in international reserves, it said. Its liabilities were attributed primarily to higher balances in its deposit liabilities. This is part of the bank’s continued liquidity management operations, the central bank added. — PE/VS, GMA News