Philippine Daily Inquirer
7:43 pm | Monday, October 21st, 2013
The Bangko Sentral ng Pilipinas (BSP) slashed its losses in the January to August period of the year amid lower interest expenses, and a weaker peso, which made dollar assets more valuable in the local currency.
Data released this week showed that the BSP’s unaudited net loss reached P14.36 billion at the end of August, 75.16-percent lower than the net loss in the same period last year.
The regulator’s net loss was also lower than the P19.21-billion loss registered as of July, which means the BSP made money only in August.
BSP Deputy Governor Diwa C. Guinigundo said the central bank’s reduced losses as of Aug. was attributed to lower interest expenses.
This stemmed mainly from rule changes for the use of the BSP’s Special Deposit Account (SDA) facility.
Nonpooled funds were banned from SDAs earlier this year.
The BSP said 30 percent of nonpooled funds already in SDAs had to be removed in July.
The remaining 70 percent has to be taken out by November.
From a peak of over P2 trillion in February, money in SDAs has fallen to P1.587 billion at start of October. Apart from refinements, the BSP has also cut rates for SDA accounts by 150 basis points to a record-low of 2 percent across all maturities.
The BSP’s interest expenses for January to August fell to P41.76 billion from P61.90 billion in the same eight-month period the year before.
Guinigundo likewise said the BSP benefited from the depreciation of the peso, which bumped up the value of dollar-denominated assets.
“If the peso were stronger, our dollar assets would have been lower if expressed in peso,” Guinigundo said. The BSP’s net gain from foreign exchange fluctuations improved to P2.55 billion as of August from a net loss of P30.05 billion last year.
The peso has depreciated by 4.65 percent since the start of the year as of Oct. 4, more than the Malaysian ringgit’s 3.64 percent and the Thai baht’s 2.21 percent.
The Singapore dollar, meanwhile, appreciated by 1.93 percent.
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Tags: Bangko Sentral ng Pilipinas , Banking , Business , currency , News
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