Rules governing foreign exchange transactions have been further liberalized to encourage investments in the Philippines, the Bangko Sentral ng Pilipinas said on Friday.
In a statement, Governor Amando Tetangco Jr. said the continuing review of forex regulations was consistent with the central bank’s commitment to maintain a safe and sound financial system, a stable foreign exchange market and a monetary policy supportive of sustained and inclusive economic growth.
“The measure will facilitate outward remittance of excess funds arising from such cases and in the process encourage more foreign investors in investing in the Philippines,” the central bank said of the Monetary Board-approved rules.
Prior central bank approval will no longer be required for borrowings from offshore sources or foreign currency deposit units of banks.
The exemption will be for purely private sector loans—those without a bank or public sector guarantee—that are intended to finance energy- or power-related projects.
“The policy is in support of the country’s growing economy and increasing need for infrastructure,” the central bank said.
Private non-bank financial institutions engaged in microfinance activities are also exempted from securing central bank approval provided that the loan proceeds will be used for microfinance lending.
The central bank said the exemption would help promote the financing of microfinance activities in line with a flagship program for financial inclusion and poverty alleviation.
Lastly, the amended rules now allow the conversion to foreign exchange of pesos arising from disapproved subscriptions of non-resident investors to stock rights offering of Philippine Stock Exchange-listed firms.