The Bangko Sentral ng Pilipinas’ (BSP) net income as of end-September fell by 76.34 percent to P22.34 billion versus P94.58 billion same period last year due to higher expenses arising from higher interest costs, based on its latest statement of income and expense.

The BSP, one of the mandated seed money contributors to the Maharlika Investment Corp., had revenues of P131.14 billion in the first nine months, up by 8.2 percent from P121.21 billion last year.

This was mostly interest income from international reserves and domestic securities. Interest income increased by 25.9 percent to P144.19 billion as of end-September from P114.53 billion same time in 2022. Miscellaneous income contracted to P13.6 billion, reversing a P6.69 billion gain last year.

Meanwhile, total expenditures increased by 69.7 percent to P156.57 billion as of end-September from P92.94 billion same time in 2022. The BSP pay high costs for its banknotes production and coin minting cost, as well as taxes and licenses fees, and from its open market operations.

Interest expenses increased by 132.59 percent to P123.95 billion from P53.29 billion. Other expenses amounted to P32.63 billion which was lower than the previous year’s P38.95 billion.

As of end-September, BSP foreign exchange or FX gains amounted to P47.80 billion, down 27.5 percent from same time last year of P65.64 billion. FX gains are realized gains from fluctuations in FX rates arising from BSP’s foreign currency-denominated transactions.

The central bank’s total assets for the January to September period dropped by 0.1 percent to P7.33 trillion from P7.338 trillion in 2022 while total liabilities also declined by 0.5 percent to P7.193 trillion from P7.228 trillion.

The BSP’s net worth as of end-October was at P136.99 billion, higher than same period last year of P109.64 billion. The net worth was higher because of surplus reserves of P76.99 billion.

The BSP in a report said its “financial condition remained strong with its international reserves comprising the bulk of the central bank’s total assets. International reserves.” As of end-September, gross international reserves amounted to $101 billion.

For decades since the BSP was established in 1993 from the ashes of the bankrupted Central Bank of the Philippines, the BSP only had P10 billion in capitalization, short of the P50 billion promised under the law. The entire P50 billion was given to the BSP in full 20 years later, in 2013.

In 2019, the amended BSP Charter raised its capitalization from P50 billion to P200 billion. The plan was to buildup BSP’s capitalization by not remitting dividends to the National Government (NG) and keeping the money to fund its price and financial stability operations.

At the moment the BSP has a P60-billion capital. Due to the Covid-19 crisis, the BSP continued to remit to the NG in 2020, 2021 and 2022 to help in the anti-pandemic response.

In 2022, the BSP’s net income amounted to P63.73 billion. This was higher from 2021’s P33.98 billion.