Senate takes up BSP charter changes
The Senate committee on banks, financial institutions and currencies is now studying the passage of a measure that would amend the two-decade-old charter of the Bangko Sentral ng Pilipinas (BSP) to keep the country’s banking system up to date with the innovations of a modern globalized economy.
Sen. Francis “Chiz” Escudero, chairman of the panel, said his committee is now studying several proposals to change the BSP charter and giving the central bank greater operation flexibility and more financial resources.
“The BSP needs to keep abreast with the changing times... The capital boost will enable them to monitor, supervise and examine the web of transactions in the banking system,” Escudero said.
“The proliferation of computerized banking transactions necessitates technical development for BSP to fully discharge its mandate in the banking and financial systems,” he stressed.
Apart from Escudero, other senators who sought to amend the BSP Charter include Senate President Pro Tempore Franklin Drilon (Senate Bill No. 18) and Senate minority leader Ralph Recto (Senate Bill No. 859).
Senate Bill No. 1027, Escudero’s version of the bill aims to strengthen BSP’s monetary stability function and supplement the mechanisms in protecting savings of depositors and in ensuring the smooth flow of transactions in the financial system.
The bill also seeks to increase its capitalization by R150-billion. BSP Governor Amando Tetangco Jr. earlier expressed his support for Senate Bill No. 1027, which Escudero put forward during a committee hearing.
Tetangco said that since the BSP’s restructuring in 1993, BSP’s capitalization has remained constant for the past 23 years even after the country experienced two financial crises — the Asian financial crisis in 1997 and the global financial crisis in 2007.
Escudero, however, said if the fund will be automatically appropriated, it will be considered as an off-budget item and will not have to pass through the scrutiny of Congress anymore.
He noted that since the BSP’s inception 23 years ago, the scope of the operations of financial institutions has evolved. It is high time, he said, that the BSP is given monetary and financial stability, as well as corporate and financial viability to respond to contemporary challenges.