MANILA -- Gains from foreign exchange rate fluctuations and higher interest income boosted the Bangko Sentral ng Pilipinas’ (BSP) net income in the first seven months of 2018, rising nearly four times year-on-year.
Bangko Sentral ng Pilipinas (BSP) data show that gains from foreign exchange fluctuations as of end-August this year reached PHP24.89 billion, higher than the PHP11.19 billion in the same period in 2017 and the PHP15.48 billion in the whole of 2017.
This contributed to the rise of the central bank net income to PHP33.07 billion at the end of the seven-year period, way higher than the PHP8.5 billion in end-July last year.
The improvement of the central bank’s income transpired even as the local currency had lost about eight percent against the US dollar since the start of the year.
To date, the peso is trading at PHP53-54 against the greenback, with the volatility traced to external developments such as concerns on US and its trading partners, among others.
Also, investors expect the Federal Reserve to continue its rate hike moves, thus, the preference for safe haven assets like the dollar.
Amid the peso’s weakness, monetary officials said the peso remains resilient and is at the middle of the range in terms of depreciation and volatility in the region.
Revenues by the central bank as of July this year rose to PHP42.53 billion, 12.1 percent higher than year-ago’s PHP37.96 billion.
This is also due to the rise of interest income to PHP42.61 billion, better than the PHP32.39 billion same period last year.
The rise in revenues was helped by the 15.5 percent drop in expenses to PHP34.33 billion from year-ago’s PHP40.61 billion.
This decline was traced to the smaller interest expenses amounting to PHP15.59 billion against the PHP22.26 billion same period last year.
The improvement of central bank’s income has continued since 2016 after posting net losses from 2010 up to 2015 given the volatilities overseas, among others, which negatively impacted the local currency.
The BSP has a market-determined exchange rate policy but joins the market to address extreme foreign exchange volatility. (PNA)