MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) announced the further easing of foreign exchange rules, this time covering non-banks with quasi-banking functions (NBQBs).
BSP Governor Amando Tetangco Jr. said in a statement the Monetary Board has approved the lifting of prior BSP approval and registration requirements for loans to be obtained by (NBQBs) from offshore sources, offshore banking units and foreign currency deposit units (FCDUs) of banks.
The BSP said the lifting of the approval and registration requirements for borrowings of NBQBs would take effect on Sept. 15 together with the other liberalization measures approved by the regulator last week.
BSP Deputy Governor Diwa Guinigundo told reporters the new policy would facilitate borrowing transactions of NBQBs to fund their operations and projects and better contribute to economic growth.
Guinigundo explained the transactions would still be covered by the reportorial requirements under the Manual of Regulations on Foreign Exchange Transactions.
NBQBs are financial institutions that do not have full banking license but they facilitate bank-related financial services such as investment, risk pooling, contractual savings and market brokering.
Business ( Article MRec ), pagematch: 1, sectionmatch: 1
These financial institutions are authorized by BSP to borrow funds from 20 or more lenders for their own account through issuances, endorsement or assignment with recourse or acceptance of deposit substitutes for purposes of re-lending or purchasing receivables and other obligations.
Tetangco said the BSP would continue to study and adopt policy reforms given prevailing conditions as well as projected trends and developments onshore and offshore.
Last week, the BSP 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.”
This was more than four times than the original $120,000 cap. For companies, the limit was at a higher $1 million.
Likewise, the BSP allowed travelers to deposit foreign exchange purchased from banks for their use abroad in their foreign currency deposit unit (FCDU) accounts.
The central bank also raised the legal tender that may be brought in and out of the country was also raised to P50,000 from just P10,000.
“This intends to provide greater convenience to travelers to and from the Philippines and allow settlement of obligations in jurisdictions outside the Philippines,” the central bank said.
The prohibition on selling other currencies by banks to corporations for transactions onshore was also lifted.
FCDU loans may also be availed of without prior registration or BSP approval.
“This is in line with the BSP’s thrust to facilitate access of the private sector to bank financing,” it said.
The BSP has been adopting measures to ease foreign exchange and documentary requirements on sending money abroad to lure depositors back to the banks.