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THERE is
hope yet the Bangko Sentral ng Pilipinas (BSP) could
turn its finances around and stop a financial hemorrhage
that has cost it P50 billion thus far.
BSP
Governor Amando M. Tetangco Jr. said on Monday the
national government (NG) pledged to remit the unpaid
P40-billion balance of its capital contribution by next
year.
“I am
optimistic the national government would give us the
P40-billion balance by early next year,” he said at the
sidelines of the 9th Intercollegiate Finance Competition
the BSP hosted with the Finance Executives Institute of
the Philippines, or Finex.
According to Tetangco, the BSP has held preliminary
discussions with Budget Secretary Rolando Andaya on the
subject, and that the former legislator vowed to support
them in their quest to obtain the full capital
contribution from government.
When the
old Central Bank of the Philippines became the Bangko
Sentral in July 1993, NG infused only P10 billion of the
P50 billion the BSP charter required, promising to pay
the balance.
The
strengthening peso and the foreign-currency adjustments
the BSP had to do as a consequence have made the unpaid
NG capital contribution relevant again.
“That’s
why we are getting the P40 billion in unpaid
subscription by the national government,” Tetangco’s
deputy, Diwa Guinigundo, told reporters a week earlier.
Tetangco
refused to dwell too much on the subject, but he gave
assurance the details completing the government’s
capital contribution is presently being worked out.
The
Department of Finance previously saw no immediate need
to complete its capital contribution to the BSP, as
every year since 1993, a succession of governors have
remitted without fail billions of pesos worth of
dividends to the national coffers.
Times
have changed, and while officials deny it, the need to
obtain more capital contribution “has become sexy
again.”
Unofficial data at the BSP web site show the central
bank incurring losses of P50 billion in the first seven
months due to the 5-percent appreciation of the peso
from year-to-date.
It
previously reported a loss of P32 billion in the first
half, indicating a surging problem that seems to have
locked in step with the peso’s stride up the exchange
scale.
Currency
traders previously reported heavy dollar-buying
activities by the BSP to keep the peso from rising too
fast, releasing potentially deadly liquidity into the
system.
On
Monday Tetangco said the monetary tools now in place are
considered sufficient for sustained economic expansion,
never mind the attendant costs to them.
Guinigundo also previously said the recent
25-basis-point cut in the policy rates of the BSP had a
beneficial impact on their bottom line, as they now pay
significantly lower interest rates on bank funds brought
to the overnight window every day.
Still,
the costs to the BSP is staggering when one considers
the central bank pays an average of 6 percent on
estimated special deposit accounts that mature every two
weeks up to six months. |
