Bangko Sentral losses balloon nearly threefold

Losses of the Bangko Sentral ng Pilipinas ballooned last year as the monetary authority struggled with declining revenues from gold sales coupled with huge expenses from interest payments and heavy dollar purchases. Bangko Sentral governor Amando Tetangco Jr. said losses of the central bank were a result of its fulfillment of its mandate of helping keep stability in the economy. “The BSP’s losses resulted from the monetary authority’s conduct of its stabilization function in the face of strong foreign capital inflows and ample liquidity in the system,” Tetangco said in a text message to reporters. According to the Bangko Sentral's unaudited financial statement, net loss rose by 183 percent to P95.38 billion last year from P33.69 billion in 2011.   The net loss last year came about as the central bank’s revenues reached P65.73 billion, expenses hit P110.69 billion, and foreign exchange losses amounted to P50.38 billion. Last year's revenues marked a 44.6-percent drop from P118.74 billion in 2011. This was largely due to the decline in the BSP’s gold sales, as it decided to sell less gold last year because of the drop in gold price in the international market. Expenses, meanwhile, represented a 4.6-percent decline year on year from P115.97 billion. The drop was small even as the Bangko Sentral cut its key policy rates by a significant 100 basis points last year. This is because the central bank had to accommodate more deposits from banks to help keep inflation modest even as liquidity in the economy was growing. Inflation settled at 3.2 percent last year, near the lower end of the central bank's 3 to 5 percent target. Foreign-exchange losses, meanwhile, were up by 39 percent year on year from P36.22 billion due largely to the central bank's dollar purchases, which officials had said were necessary to help prevent an even sharper rise of the peso. The peso closed at 41.05 against the US dollar on the last trading day of 2012, appreciating by close to 7 percent since the start of the year and eliciting complaints from the export and overseas Filipino sector. — BM, GMA News