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CEBU CITY—The
Bangko Sentral ng Pilipinas (BSP) announced a plan to
further ease the documentary requirements on foreign
exchange transactions.
At the
conclusion of its financial literacy campaign in this
city, BSP Governor Amando M. Tetangco Jr. said more
changes were to be adopted consistent with efforts to
further strengthen domestic institutions, particularly
the banks.
“We are
going to simplify the documentary requirements while
still ensuring data capture,” his deputy, Diwa C.
Guinigundo told reporters.
He said
there is an ongoing review of the existing foreign
exchange reporting process to make the system more
efficient.
Documentation, useful for purposes of establishing the
money trail, forms part of the strict guidelines adopted
by local authorities to conform to global antimoney
laundering best practices.
Foreign
inflows surged even more after the BSP initially
announced a package of reforms easing the guidelines on
foreign exchange transactions last February.
Before
that, bank foreign exchange purchases and sales were
fixed as percentage of unimpaired capital even as
sustained foreign inflows made the local currency, the
peso, buoyant.
“Upgrading the forex regulatory framework will make it
more responsive to the needs of an expanding, more
dynamic economy that is increasingly integrated with the
global markets,” Guinigundo said.
Neither
he nor Tetangco gave away anything they have in mind,
saying only that countries with liberalized regimes
boosted their limited savings, enabled investors to
diversify portfolios, boosted the liquidity and depth of
their markets, encouraged macroeconomic policy
discipline, reduced the burden on the regulators even as
administrative costs were cut.
Prior to
1993, foreign exchange receipts were surrendered to the
central bank and dollar purchases were a highly
regulated activity.
Deregulating the system allowed the revitalized Bangko
Sentral ng Pilipinas to attain Article Eight status with
the International Monetary Fund two years later.
When
policy was restrictive, banks with high demand from
clients resorted to “splitting” their forex purchases to
circumvent the rules.
Justifying the nontrade related purchases with
documentary proof burdened everyone, the banks most of
all.
Beginning April 2 this year, the liberalized rules
eliminate the need for banks to split their dollar
purchases, do away with notarizing all applications for
the same regardless of amount to streamline the entire
process, Tetangco said. |
