A BANGKO Sentral ng Pilipinas (BSP) executive is hoping that President Benigno Aquino 3rd will include among the administration’s priority bills the amendment of the central bank’s BSP Charter, which includes the increase in its capitalization.
BSP Deputy Governor Diwa Guinigundo said the higher capitalization is “very urgent” to further strengthen the central bank’s capacity to fulfill its mandate of ensuring price stability in the domestic economy.
“The increasing uncertainty in the global market warrants the strengthening of the Bangko Sentral ng Pilipinas as a monetary authority,” he said.
Earlier, Finance Secretary Cesar Purisima said BSP Charter amendment is among the nine proposed bills that he hopes will be included in the Executive branch’s measures.
The central bank has been ending the day year in net loss for the past three years as it addresses the strengthening of the peso to a dollar among others.
The local currency has generally proven its firmness against the US currency on back of continuing improvement in the country’s fundamentals making investors bullish on the economy, which lends credence to the local unit.
BSP, under the Central Bank Act of 1993, is mandated to have a P50 billion capitalization after it was reorganized from the debt-laden Central Bank of the Philippines.
It was initially given P10 billion in its first year of operations.
The Aquino administration gave the BSP P10 billion in December 2011 on back of improvement of fiscal situation and P20 billion in December 2012.
It vowed to give the remaining P10 billion capitalization in December this year.
However, monetary officials said the increasing demand of its mandate calls for higher capitalization.
Admitting that providing cash is really a tough task given that the government also needs the cash to finance its programs, Guinigundo raised the possibility of burden sharing but declined to elaborate.
He said BSP has yet to submit another version of its proposed Charter Change amendment that contains among others how its capitalization would be hiked. PNA