THE latest amendments to the foreign exchange regulatory environment in the country are expected to support the growth of businesses and investments, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said.
Recent FX reforms under Circular 1124 aim to promote greater ease in the use of FX resources of the banking system, and further streamline and simplify procedures and documentary requirements for FX transactions by allowing, among others, electronic submission of documents and use of electronic/digital signatures.
“The reforms are in line with the BSP’s commitment to maintain an FX regulatory framework that is responsive to the needs of a dynamic and expanding Philippine economy,” Diokno said.
Earlier this year, the BSP also allowed the sale of FX by banks to e-commerce market participants without prior BSP approval.
The Monetary Board also recently raised the banks’ net open FX position (NOP) limit to 25 percent of a bank’s qualifying capital or $150 million, whichever is lower. The previous limit is 20 percent of unimpaired capital or $50 million, whichever is lower.
A bank’s NOP represents the amount of its net assets and/or liabilities denominated in foreign currency.
“While the rules are already liberalized, the BSP is continuously reviewing the FX regulatory framework of the country to ensure that these are aligned with prevailing market conditions and that the general public will have continued access to FX resources of the banking system for legitimate FX transactions,” the governor said.
“The recent FX reforms are also seen to promote capital market development by allowing funding of peso deposit accounts of non-residents with peso receipts related to loans and investments, among others; and lifting the prior approval requirement for derivatives transactions of non-bank government entities,” he added.