Bangko Sentral ng Pilipinas further relaxed the rules on documentation of foreign loans and other obligations to ease foreign exchange transactions in the country.
Bangko Sentral Governor Amando Tetangco Jr., who is also the Monetary Board chairman, said in a statement Friday the policy-making body lifted the prohibition on notarization of documents covering foreign loans, deferred payment and other foreign or foreign currency-denominated obligations of the private sector.
“Previously, such documents of both the public and private sectors were prohibited from being notarized. The move is part of continuing efforts to have an appropriate regulatory framework for foreign exchange transactions,” Tetangco said.
He said the change in policy would cover purely private sector accounts, or those without guarantee or foreign exchange exposure on the part of the government financial institutions or government-owned or -controlled companies that are submitted to Bangko Sentral for approval and registration.
“It will, thus, provide the private sector greater flexibility with respect to documentation of their financing agreements to meet specific requirements of creditors and/or foreign laws that may govern such transactions,” he said.
Tetangco also said the corresponding provision in the Manual of Regulations on Foreign Exchange Transactions would accordingly be revised.
He said the review and fine-tuning of Bangko Sentral regulations was consistent with its commitment to maintain a safe and sound financial system, a stable foreign exchange market, and an appropriate monetary policy supportive of sustained and inclusive economic growth.
The Monetary Board last month also announced some amendments on the rules governing foreign exchange transactions in the Philippines.
It said prior Bangko Sentral approval was no longer required for the borrowings from offshore sources/FCDUs of banks of purely private sector loans, or those without guarantee from the public sector or banks, that are intended to finance energy-/power-related projects.
It includes private non-bank financial institutions engaged in micro-finance activities where loan proceeds will be used for micro-finance lending
Bangko Sentral said this would help promote financing of microfinance activities in line with the BSP’s flagship program for financial inclusion and poverty alleviation.
Also, the conversion to foreign exchange of pesos arising from disapproved subscriptions of non-resident investors to stock rights offering of companies listed at the Philippine Stock Exchange is now allowed.
“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,” Bangko Sentral said.
