FX rules relaxed anew to attract investments

MONETARY authorities have further eased the rules covering foreign exchange (FX) transactions to boost financing for energy projects, promote microfinance as well as attract more investors.

In a statement Saturday, Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said among the policy amendments the Monetary Board recently approved included allowing “conversion to FX of pesos arising from disapproved subscriptions of nonresident investors to stock rights offering of companies listed at the Philippine Stock Exchange.”

“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,” the BSP said.

Prior BSP approval will also no longer be needed for borrowings from offshore sources or foreign currency deposit units (FCDUs) of banks for purely private sector loans (without guarantee from the public sector or banks) that will finance energy and power projects.

“The policy is in support of the country’s growing economy and increasing need for infrastructure,” the BSP said.

BSP approval is also not anymore required for loan proceeds to be used for microfinance lending by private nonbank financial institutions.

“This will help promote financing of microfinance activities in line with the BSP’s flagship program for financial inclusion and poverty alleviation,” it said.

In line with these policy amendments, the BSP said it also approved clarificatory and procedural amendments to the Manual of Regulations on Foreign Exchange Transactions. The BSP said it would soon issue the implementing circular governing the amended rules.

“The continuing review of FX regulations is consistent with the BSP’s commitment to maintain a safe and sound financial system, a stable FX market, and appropriate monetary policy supportive of sustained and inclusive economic growth,” said Tetangco, who chairs the Monetary Board, the BSP’s highest policy-setting body.