The Monetary Board (MB) has approved further amendments to FX regulations to promote greater ease in the use of FX resources of the banking system, and further streamline/simplify procedures and documentary requirements for FX transactions, the Bangko Sentral ng Pilipinas (BSP) said on Wednesday.
The FX reforms also intend to facilitate digital payments/electronic transactions, support the infrastructure development projects/programs of the National Government, and help further deepen the domestic capital market.
The major FX reforms include, among others, allowing the following:
1. Sale of FX by banks without prior BSP approval for the following FX transactions involving:
a. E-commerce market participants to support digital payments/electronic transactions;
b. Offsetting of payables with receivables between/among residents for various FX transactions, and residents with non-residents for their trade and non-trade current account transactions;
c. Living allowance/medical expenses of dependents abroad, among other non-trade current account transactions;
d. Importation of goods with services covered by Engineering, Procurement and Construction (EPC) contracts; and
e. Payment of fees prior to registration provided that the foreign loans are duly reported to the BSP;
2. FX derivatives transactions to be entered into by non-bank government entities without prior BSP approval; and
3. Use of peso receipts relating to trade transactions to fund peso deposit accounts of non-residents, among others.
These reforms are part of the BSP’s commitment to maintain an FX regulatory framework that is responsive to the needs of a dynamic and expanding Philippine economy. However, the BSP expects banks to continue to implement safe and sound practices amid the continuing liberalization of FX rules.
The implementing Circular will take effect fifteen (15) banking days after its publication. Notwithstanding the issuance of the implementing Circular, the operational relief measures for FX transactions under Circular No. 1080 dated 27 March 2020 and related Circular-Letters that were not superseded by the implementing Circular (e.g., waiver of processing fees and lifting of prescriptive periods for applications with the BSP) remain effective for the declaration of “community quarantine” by the Office of the President, or as may be extended by the BSP.