BSP’s net profit up on higher interest income

The Bangko Sentral ng Pilipinas’ (BSP) net income grew by more than five times to PHP 113.1 billion in the first 10 months of 2024 as its revenues surged amid higher interest earnings.

The central bank’s net profit surged to PHP 113.1 billion in the January-October period from PHP 21.6 billion a year prior, preliminary data posted on its website showed.

Broken down, the BSP’s revenues jumped by 49.5% year on year to PHP 264.1 billion from PHP 176.6 billion.

Interest income, which accounted for the bulk or 76% of the central bank’s revenues, climbed by 23.1% to PHP 200.7 billion from PHP 163 billion a year prior.

Miscellaneous income, which includes fees, penalties and other operating income, increased by 366.2% to PHP 63.4 billion from PHP 13.6 billion.

Meanwhile, the central bank’s expenses declined by 11.5% to P182.3 billion in the 10-month period from PHP 206 billion in the previous year, according to the data.

This came as other expenses, which include net trading losses, fell by 37.1% to PHP 42.3 billion from PHP 67.2 billion.

On the other hand, its interest expenses inched up by 0.9% to PHP 140 billion in the period from PHP 138.8 billion a year prior.

This brought the BSP’s net income before foreign exchange (FX) gains, tax and capital reserves to PHP 81.8 billion in the January-October period, a turnaround from the PHP 29.4-billion loss in the prior year.

The central bank also posted a PHP 31.4-billion net FX gain from its foreign currency-denominated transactions, which boosted its bottom line for the first 10 months of 2024.

Meanwhile, separate BSP data showed that the regulator’s total assets stood at PHP 8.19 trillion at end-October 2024. This was 9.5% higher than the PHP 7.48 trillion in the same period the year prior.

On the other hand, the central bank’s liabilities increased by 7.6% to PHP 7.93 trillion in the same period from PHP 7.36 trillion.

BSP data showed that currency in circulation stood at PHP 2.38 trillion, while deposits with the central bank were at PHP 2.71 trillion.

The BSP’s net worth rose to PHP 266.2 billion at end-October from PHP 119.8 billion from a year prior.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the increase in the central bank’s January-October net income came amid the elevated interest rate environment.

“This could be brought about by higher interest income in most of 2024 and other investment income amid rate cuts that started in the latter part of 2024, though offset by some market volatility amid the Trump factor that emerged starting around October,” he said.

The BSP began its easing cycle in August last year, cutting by a total of 75 basis points thus far to bring its policy rate to 5.75%.

The increase was “also partly due to some forex gains amid the higher US dollar in 2024 amid US dollar holdings with higher value when converted to pesos,” Mr. Ricafort added.

The peso closed at PHP 58.10 per dollar at end-October 2024, weakening from its PHP 56.73 finish a year prior.

The local unit mostly traded at the PHP 55 to PHP 58 level in the first 10 months of 2024. In the same period in 2023, it ranged from PHP 54 to PHP 56. — Luisa Maria Jacinta C. Jocson