BSP cuts losses to P19 B

MANILA, Philippines - The Bangko Sentral ng Pilipinas continues to narrow its losses as of September due to lower interest rates on the Special Deposit Accounts (SDA) facility and a decline in foreign exchange losses for the period.

The central bank incurred a net loss of P19.38 billion in the nine months to September, a big improvement from the net loss of P68.36 billion recorded in the same period last year.

Revenues during the period slid 7.6 percent to P46.5 billion from P50.35 billion last year, driven by a decline in interest earnings.

Interest income declined 20.3 percent to P24.55 billion during the period from P30.79 billion, while miscellaneous earnings climbed 12.2 percent to P21.95 billion from P19.56 billion.

Expenses, meanwhile, decreased 20.8 percent to P65.88 billion from P83.14 billion as interest expenses shrank due to lesser interest paid on the bank’s SDA facility.

Interest expenses contracted 33.6 percent to P46.01 billion from P69.31 billion, while other expenses grew 43.7 percent to P19.87 billion from P13.83 billion.

The BSP has cut the SDA’s interest rates by 150 basis points this year to make the facility less attractive to investors who found it a favorable venue to park their funds amid falling interest rates.

Moreover, the BSP ordered the removal of singular investment management accounts (IMA) in the facility to flush out funds from the SDA and encourage investors to use them for economic activities or put them in other instruments.

Banks have already taken out 30 percent of their IMA in the SDA last July, while the remaining 70 percent would be phased out by end-November.

At the same time, the BSP also recorded a P2.21 billion gain from foreign exchange rate fluctuations as of September, a reversal from a loss of P35.56 billion seen in the same period last year.

The BSP this year has seen an improving bottom line from a net loss of P95.38 billion recorded last year.