Hike in BSP capital to P200B pushed | Inquirer Business

Hike in BSP capital to P200B pushed

By: - Deputy Day Desk Chief / @TJBurgonioINQ
/ 07:20 AM October 19, 2013

MANILA, Philippines—The country’s central bank should be enjoying a capital four times bigger than the current P50 billion so it can respond better to global challenges, said Senate President Franklin Drilon.

Drilon has filed Senate Bill No. 1865 seeking to increase the capitalization of the Bangko Sentral ng Pilipinas (BSP) to P200 billion, among other amendments to its charter.

The additional capitalization and other amendments will boost the BSP’s capability to protect depositors’ savings, ensuring smooth transactions in the financial market and increasing its own corporate viability, he said.

Article continues after this advertisement

Drilon said the BSP charter needs to be amended so that it remains effective in providing policy directions in such areas as money, banking and credit, as well as in overseeing the financial system.

FEATURED STORIES

“We have to support the BSP in its constitutional mandate of ensuring a competitive, robust and inclusive economy,” he said in a statement.

Drilon proposed that the government shoulder the P150-billion additional capitalization in three consecutive annual installments.

Article continues after this advertisement

The BSP’s main goal is to maintain price stability “conducive to a balanced and sustainable economic growth,” as well as preserve monetary stability.

Article continues after this advertisement

Its functions include implementing a monetary policy designed to influence money supply; issuing national currency; extending loans to banking institutions to ensure liquidity; maintaining international reserves to meet demands for currencies; and determining the exchange rate policy.

Article continues after this advertisement

It acts as the banker, financial advisor and official depository of the government.

Apart from the capital buildup, the Drilon measure sought to expand the BSP’s regulatory function to include credit card companies, money changers, e-money issuers, remittance agents, payments and settlement system operators.

Article continues after this advertisement

In effect, the BSP will oversee the payments and settlements system in the country in accordance with “sound and prudent practice,” he said.

Under the bill, the BSP is granted powers to obtain information on transactions between a supervised institution and a parent company or other affiliates, said Drilon.

It’s also authorized to look into the main activities of companies affiliated with parent companies that “have a material impact on the safety and soundness of the bank and the banking group,” he added.

The measure also seeks to strengthen the BSP’s monetary stability function by restoring its authority to issue “negotiable certificates of indebtedness” even during normal times, Drilon said

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our daily newsletter

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

This power was granted to the old Central Bank of the Philippines, but was not included in the current BSP charter, he said.

TAGS: Bangko Sentral ng Pilipinas, BSP, central bank, Central Bank of the Philippines, economic growth, Franklin Drilon

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our newsletter!

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

© Copyright 1997-2024 INQUIRER.net | All Rights Reserved

This is an information message

We use cookies to enhance your experience. By continuing, you agree to our use of cookies. Learn more here.