BSP asks entities to disclose ’19 foreign borrowing plans

The Bangko Sentral ng Pilipinas wants a better handle on capital from abroad flowing into or out of the country to better analyze its impact on the domestic economic.

To do this, the monetary authority wants both public and private entities to submit their overseas borrowing plans for next year by the end of this month—potentially market sensitive information that the BSP vowed to keep secret.

In line with the responsibility of the Bangko Sentral ng Pilipinas (BSP)  to monitor capital flows and analyze their implications on the economy,  an annual survey is conducted to get an indication of the magnitude and timing  of the economy’s financing requirements for the following year,   as well as the purpose of such borrowings, among others.

In a statement, the central bank said this order covered “all resident entities, both public and private, intending to obtain medium- and long-term foreign loans from offshore sources, such as banks, foreign parent companies, affiliates or shareholders, including offshore issuances of debt instruments.

Also encouraged to submit their data to authorities are those public or private entities planning to issue onshore debt instruments that require settlement in foreign currency.

The deadline for submission of the required information to the BSP’s International Operations Department is Sept. 30, 2018.

“All reported data are covered by strict confidentiality rules and used for the BSP’s internal purposes only,” the central bank said. “The BSP, therefore, enjoins  the cooperation of all concerned.”

The data submission to the central bank is voluntary as regulators have progressively liberalized the country’s foreign exchange market in recent years.

At present, corporate borrowers are no longer required to seek the approval of the Monetary Board before taking out a foreign currency loan or issuing a foreign currency-denominated bond. Companies are also free to source their dollar requirements from the formal banking system or outside of it, depending on their needs.

7.4 months worth of imported goods and services for the local economy.