BSP further liberalizes foreign exchange regulations

Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa C. Guinigundo, currently Officer-in-Charge, said the central bank has again liberalized foreign exchange (FX) regulations to make it easier to access foreign currencies.

Guinigundo said the following rules will no longer require prior BSP approval: the conversion of foreign currency loans granted by banks to peso loans; and transfer of such loans, as well as Real and Other Properties Acquired from banks’ foreign currency deposit unit books to the Regular Banking Unit books.

“Thus, these transactions no longer require prior BSP approval under certain conditions which seek to ensure that banks fully understand the nature and extent of the risks involved and that they have put in place appropriate business policies and risk management systems to manage these transactions,” the statement quoting Guinigundo said.

The central bank reiterated that FX rules amendments that further liberalize regulations have provisions that would ensure that a “safe and sound financial system, a stable FX market, and an appropriate monetary policy” is maintained.

In January, a set of FX rules changes were also adopted to improve data capture of the country’s external obligations. These changes are intended to support economic growth.

These rules also entailed the removal of prior BSP approval for purely private sector loans or loans without guarantee from/exposure of any public sector entity.

The BSP also cut down the list of requirements for the registration and purchase of FX from the banking system.