MANILA, Philippines – Banks said the implementation of another set of foreign exchange liberalization measures starting today would make the country’s financial system more safe and at the same time reduce the number of black market currency trades.
HSBC president and CEO Jose Arnulfo “Wick” Veloso said in a press conference the ninth wave of foreign exchange liberalization measures approved by the Bangko Sentral ng Pilipinas (BSP) “is a very positive move and a step in the right direction.”
Veloso also chairs the open market committee of the Bankers Association of the Philippines (BAP).
“The benefit to the public is just significant. It allows them to be able to deal with financial institutions instead of any entity that just sells foreign exchange. They are now able to purchase foreign exchange in entities that are regulated extensively by the BSP,” he said.
BSP Governor Amando Tetangco Jr. yesterday issued Circular 95 laying down the amendments to the manual of regulations on foreign exchange transactions.
The BSP has further relaxed foreign exchange rules by allowing Philippine residents – both natural-born Filipinos and foreigners residing in the country – to purchase up to $500,000 in foreign exchange “without supporting documentation.”
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For companies, the limit was raised to $1 million. The previous cap for both individuals and corporates was placed at $120,000.
“The country becomes a safer place to be able to transact because it allows you to be able to deal with financial institutions. It makes it very convenient for clients for the public, it is good for the overseas Filipinos,” he said.
The BAP originally sought a cap of $2 million for foreign exchange transaction for corporations. The move is expected to reduce the number of transactions in the black market.
“We could not probably eliminate but it will be to be able to capture a significant amount already that is being traded in the parallel market,” he said.
Likewise, the BSP allowed travelers to deposit foreign exchange purchased from banks for their use abroad in their foreign currency deposit unit (FCDU) accounts instead of waiting for three days.
“Before they make it difficult for you, now it allows you to be able to service your requirements outside of the country by allowing same day credit,” he said.
Veloso explained the BSP now allows the conversion of loans to peso without prior registration with the central bank.
Tetangco earlier said the BSP would continue to study and adopt policy reforms given prevailing conditions as well as projected trends and developments onshore and offshore.
