BSP plans to liberalize forex policy

With the peso still going strong, monetary authorities are thinking of further liberalizing foreign exchange policy “for a short period.”

In effect, private companies with prior authorization may be allowed to easily buy up dollars from banks, as long as the money is used to pay off foreign loans.

“The existing policy is that, when companies want to buy dollars from banks, the banks ask for them to register first,” said Amando M. Tetangco Jr., governor of the Bangko Sentral ng Pilipinas.

“For a certain period, we may allow companies … such as exporters and local manufacturers with foreign loans but are unregistered, to buy dollars for servicing such loans,” he said.

Tetangco clarified that the proposal to further liberalize the foreign exchange market would not apply to state-owned entities, which would still have to secure approval from monetary authorities regarding foreign borrowings.

Exporters have been badly affected by the peso’s appreciation.

On Tuesday, the peso closed at 42.28 against the US dollar.