THE Bangko Sentral ng Pilipinas (BSP) has extended by another year the period under which those foreign entities requiring to register their investments may do so or forever miss the privilege attached to so-called foreign direct investments (FDI).
“The new measure is part of the BSP’s continuing efforts to facilitate the use of foreign-exchange resources of the banking system for legitimate purposes, including outward remittance in the foreign exchange equivalent of peso divestment proceeds from, and income on, registered FDI,” the BSP said.
At the sidelines of the second-quarter inflation report, BSP Deputy Governor for the Monetary Stability Sector Diwa C. Guinigundo explained foreign investors wanting to invest in the Philippines and at some point in the future want to repatriate their earnings either in terms of dividends, royalties and income, eventually need to buy dollars from the market.
Regulations require only registered FDI are allowed to purchase foreign exchange or US dollars from the formal sources, such as banks. Unregistered foreign investors may source their foreign-exchange requirements elsewhere.
To purchase foreign exchange, one has to have Bangko Sentral Registration Documents (BSRD).
“So those who have FDI need to go to the BSP and register. Once they are registered, that means the BSP can issue them the BSRD, which will entitle them to buy dollars from the market or the banks.
“We gave a sort of amnesty some time ago but that expired already. So we thought that will be OK so for the next few years, those who have not registered with us rose higher and there were some who were not able to register still, so we decided to give them additional time,” he added.
In 2013 the Monetary Board approved the adoption of a one-year prescriptive period within which applications for FDI registration must be filed with the BSP.
“This prescriptive period intends to allow the timely capture by the BSP of more current information on foreign investments flowing into the economy, for better analysis of developments and trends in capital flows and formulation of policies and strategies on the matter,” the BSP said.
A two-year transition period was also provided to allow registration of old but unregistered FDI already recognized in the books of the investee firm, regardless of when the funding for the investments came in. The two-year period ended in April 2015.
“However, in response to numerous applications for registration that were received after said date and to further widen the coverage of BSP’s database on FDI, an additional one-year grace period for filing such requests was approved by the Monetary Board subject to compliance with registration requirements under the Manual of Regulations on Foreign Exchange Transactions, as amended, and payment of a processing fee of P10,000 per BSRD to be issued,” the BSP said.
BSP Governor Amando M. Tetangco Jr. clarified the approved one-year extension is the “final chance” given to existing FDI to register with the BSP.