THE BANGKO SENTRAL ng Pilipinas’ (BSP) profit surged at end-July on the back of strong revenues, driven by higher interest rates, preliminary data showed.

The central bank’s net income increased to P95.2 billion in the first seven months of the year from P18.5 billion in the same period a year ago, based on its statement of income and expense posted on its website.

The regulator’s revenues grew by 57.1% to P190.6 billion in the period from P121.3 billion in the previous year.

Broken down, the bulk or 73.7% of its revenues came from interest income, which rose by 28.1% to P140.4 billion from P109.6 billion a year ago amid an elevated rate environment.

Miscellaneous income, which includes fees, penalties and other operating income, surged by 329% to P50.2 billion from P11.7 billion a year ago.

Meanwhile, the central bank trimmed its expenses by 8.3% to P125.7 billion in the seven months ended July from P137.1 billion in the same period the year prior.

Other expenses, which include net trading losses, declined by 35.5% to P27.4 billion from P42.5 billion.

On the other hand, interest expenses rose by 4% year on year to P98.4 billion from P94.6 billion.

The BSP’s net income before foreign exchange (FX) gains, tax, and capital reserves stood at P64.9 billion, a turnaround from the P15.8-billion loss posted in the comparable year-ago period.

Its net FX gain from foreign currency-denominated transactions dropped by 11.4% to P30.4 billion from P34.3 billion but still boosted its bottom line.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the increase in the BSP’s seven-month net profit came on the back of its high interest income amid elevated rates prior to the start of its policy easing cycle.

The central bank raised borrowing costs by a cumulative 450 bps from May 2022 to October 2023 to help tame red-hot inflation.

The Monetary Board in August delivered its first rate cut in nearly four years. It has now reduced rates by a total of 50 basis points (bps) so far this year after another easing move this month and has signaled further cuts ahead.

“The improved earnings was also due to slower growth in overall expenditures, especially interest expenses, also despite lower forex gains versus a year ago,” Mr. Ricafort added.

Meanwhile, the central bank’s total assets grew by 9.4% to P7.95 trillion as of July from P7.27 trillion in the same period in 2023.

Broken down, this was composed primarily of international reserves (P6.2 trillion) followed by domestic securities (P1.17 trillion), loans and advances (P83.4 billion) and bank premises and other fixed assets (P20.7 billion), among others.

Meanwhile, the BSP’s total liabilities rose by 8.1% to P7.72 trillion as of July from P7.14 trillion a year earlier.

Currency in circulation stood at P2.31 trillion at end-July, BSP data showed. Deposits with the central bank reached P2.69 trillion in the same period. — Luisa Maria Jacinta C. Jocson