BSP approves amendments to foreign exchange manual


The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) has approved further amendments to the Manual of Regulations on Foreign Exchange Transactions (FX Manual).

In a statement, BSP Governor Amando Tetangco Jr. said that the amendments to the manual are part of continuing efforts to promote an appropriate regulatory framework for foreign exchange transactions.

“These measures will broaden investment options available in the domestic capital market and allow freer capital mobility,” the BSP stated.

The central bank said that the amendments now allow registration by custodian banks of nonresident investments in the Philippine Stock Exchange (PSE)-listed equity securities of nonresidents.

In addition, allowing with prior BSP approval, the conversion to foreign exchange by nonresident issuers of the peso proceeds from the onshore sale of their PSE-listed equity securities.

Furthermore, the amendments also allow prepayments of BSP-registered short-term loans, subject to standard documentary requirements of foreign exchange purchases.

“This will facilitate access to the banking system for legitimate transactions requiring payment in foreign exchange,” it added.

Tetangco also affirmed the central bank’s commitment to maintaining a safe and sound financial system, a stable foreign exchange market and monetary policy supportive of economic growth.

He said that the clarifications for the manual have also been made for greater clarity of rules and better understanding by the public.


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1 Comment

  1. The BSP should change two of its responsibilities:
    1) From “stable” exchange rate to ” trade competitive” exchange rate.
    2) From monetary policy supportive of “economic growth” to monetary policy
    supportive of ” full employment”
    1) A trade competitive exchange rate reflects balance of trade and is self correcting, and determines the true value of internationally traded goods/services, A “stable” exchange rate can often just be the result of HOTMONEY surges, and dollar borrowings that create an illusion of economic success, not conducive to job creation.
    2) Economic “growth” is measured by GNP increase which does not necessarily mean more jobs in the real economy. GNP growth can be in only the financial sector,
    stock exchange activity, investments in casinos/gambling, repair of typhoon damaged civil works, not actually increasing productivity or creating lasting jobs.
    The Federal Exchange/ USA Central Bank has 2 goals : monetary stability AND
    FULL EMPLOYMENT. It has said that present buying of bonds will not stop until
    UNEMPLOYMENT has gone down to 6.5%.