MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) has further relaxed its rules governing foreign exchange transactions in the country to help finance much needed infrastructure projects and boost its financial inclusion program.
BSP Governor Amando Tetangco Jr. said the continuing review of foreign exchange regulations is consistent with the central bank's commitment to maintain a safe and sound financial system as well as a stable foreign exchange market.
Tetangco added the revisions in the rules approved by the Monetary Board would also help maintain appropriate monetary policy supportive of sustained and inclusive economic growth.
Under the revised rules, he explained prior BSP approval is no longer required for borrowings from offshore sources or foreign currency deposit units (FCDUs) of banks.
The amendment would cover purely private sector loans particularly those without guarantee from the public sector or banks that are intended to finance energy-or power-related projects.
"The policy is in support of the country's growing economy and increasing need for infrastructure," the BSP chief said.
He added private non-bank financial institutions engaged in microfinance activities are also exempted from seeking BSP approval as long as the loan proceeds would be used for microfinance lending.
"This will help promote financing of microfinance activities in line with the BSP's flagship program for financial inclusion and poverty alleviation," Tetangco said.
Furthermore, he pointed out the revised rules now allow the conversion to foreign exchange of pesos arising from disapproved subscriptions of non-resident investors to stock rights offering of companies listed at the Philippine Stock Exchange.
"The measure will facilitate outward remittance of excess funds arising from such cases and in the process encourage more foreign investors in investing in the Philippines," he added.
The central bank's Monetary Board also approved other procedural or clarificatory amendments to the Manual of Regulations on Foreign Exchange Transactions for better guidance of users.
Tetangco said the BSP would soon issue the implementing circular.
The central bank has been revising some of its foreign exchange rules for trade and settlement transactions as part of a wider liberalization program it rolled out in the last few years.
The revisions are also aimed at making the rules more responsive to the needs of the economy and easier for businesses and individuals to transact foreign exchange within the banking system.
In February last year, the BSP eased the rules by allowing the sale of foreign exchange to residents for credit card payments to resident credit card companies.
The BSP also simplified the guidelines for reporting the shipments of goods for better understanding and compliance.