BSP financially sound, says Buenaventura

The Bangko Sentral ng Pilipinas (BSP) is financially healthy and solid with a total networth of P160.47 billion as of June 2002, 16 times higher than the original paid-up capital of P10 billion infused by the national government in 1993. This was the year when the BSP was created to succeed Central Bank of the Philippines.

BSP Gov. Rafael B. Buenaventura made the statement to reassure the public that BSP maintains financial prudence even as it continues to serve as guardian of banking and price stability.

He explained that the P3.4-billion net loss incurred by BSP in the second quarter this year resulted principally from lower interest income arising from lower interest rates and foreign exchange losses on account of a stronger peso in May.

The fluctuation in performance from quarter to quarter is influenced by the behavior of the interest rate levels and the prevailing exchange rate. Since the BSP financial statements are reckoned in pesos (the country’s currency), transactions on the BSP’s foreign currency holdings cause the variance from quarter to quarter.

For instance, peso losses are incurred when dollar placements made when the exchange rate was P52 to $1 mature when the rate is P50 to $1; on the other hand, if the reverse happens, a profit is generated.

Based on unaudited statements, BSP made a net income of P3.8 billion in the first quarter this year. On a year-to-date basis, it is safe to assume that BSP will again turn in a net profit, at least equal to the P4-billion level generated in 2001.

Since 1993, BSP has been able to generate profits annually, 75 percent of which is declared as dividends to the national government. Between 1993 and 2001, BSP has remitted P72.8 billion in dividends and taxes to the national government. Total assets of BSP as of June 2002 was valued at P1.19 trillion, 4.3 percent higher than the December 2001 level of P1.14 trillion.