The Bangko Sentral ng Pilipinas (BSP) now allows foreign firms that issue securities through the Philippine Stock Exchange (PSE) to buy up to US$ 60,000 a day if they want to bring the proceeds of their investments out of the country.
This is among the amendments the central bank’s policy-making Monetary Board (MB) approved recently and stipulated under Circular No. 815, which the BSP issued on October 18, 2013.
BSP Managing Director for International Subsector Wilhelmina Manalac said under the old rules the investors are not allowed to buy foreign exchange without a prior BSP approval only because “there are no instances where non-residents issue securities in the domestic market.”
Under the new rules, the foreign investor can only buy dollars from the bank where his pesos are deposited.
The latest Circular said the peso deposits that would be exchanged for dollars without prior BSP approval must have been used in the Philippines “to fund foreign direct investment/s and/or investment in eligible portfolio instruments.”
Manalac said the Circular will take effect by November this year, or 15 days after its publication in a major daily.
The central bank has been amending its foreign exchange regulations to meet the needs of latest developments.
Last July, the BSP allowed banks to register investments of foreign nationals in securities issued by companies listed with the Philippine Stock Exchange (PSE) and for the investors to convert the peso proceeds of their investments but “with prior BSP approval.”
“These measures will broaden investment options available in the domestic capital market and allow freer capital mobility,” the central bank said.
The central bank also allowed companies to prepay their short-term (ST) loans, which are registered with the BSP, “subject to standard documentary requirements for foreign exchange purchases.
“This will facilitate access to the banking system for legitimate transactions requiring payment in foreign exchange,” it said. PNA