BSP relaxes foreign exchange transaction approval rules for banks
Banks can sell currencies without the prior approval of the BSP if they are used for activities such as online e-commerce payments, certain imports of goods, and payment of fees.
The BSP (Bangko Sentral ng Pilipinas) has relaxed its rules on currency trading, paving the way for financial institutions to sell foreign currencies without prior regulatory approval for certain commercial and non-commercial transactions.
In a circular issued earlier this month, the BSP said the reforms were part of its commitment to maintain a foreign exchange regulatory framework that “meets the needs of a vibrant and growing Philippine economy” and to promote a more great ease of use of the foreign exchange resources of the banking system.
“Foreign exchange reforms are also aimed at facilitating digital payments or electronic transactions, supporting national government infrastructure development projects or programs, and helping to further deepen the national capital market. “
Under the relaxed rules, banks are allowed to sell currencies without the prior approval of the BSP if they are used for activities such as online payments for e-commerce and imports of goods that are part of engineering contracts. , procurement and construction.
The sale of foreign currency for the payment of fees before registration is also allowed without the prior approval of the central bank, provided that foreign loans are duly reported to the BSP.
Banks can also sell foreign currency without the prior approval of the BSP if it is used for non-business or personal purposes, such as living allowance and medical expenses for dependents abroad.
In addition, non-bank government entities may enter into foreign exchange derivative transactions without the consent of the BSP, and the use of peso receipts is permitted for commercial transactions to fund the peso deposit accounts of non-residents.
The BSP said it will also allow financial institutions to electronically submit documents, such as those on the approval and registration of foreign currency loans, registration of foreign investments and other sales-related requests. of currencies.
From August 1, the BSP also increased the allowed net open foreign exchange position for banks to 25% of eligible capital, or $ 150 million, whichever is lower. The previous cap was 20% of impaired capital or $ 50 million.