The Senate on Monday approved on third and final reading a measure that will give a P150-billion increase in the capitalization of the Bangko Sentral ng Pilipinas (BSP).
Under Senate Bill No. 1297 or “An Act Amending RA 7653, otherwise known as “The New Central Bank Act,” the capitalization of the BSP will be increased from P50 billion to P200 billion.
“The bill proposes to strengthen the tools which the BSP exercises in performing its mandates, supplement the mechanism in protecting savings of depositors and in ensuring the smooth flow of transactions in the financial system as well as to enhance the corporate viability of the BSP,” Senator Francis Escudero said after the bill’s approval.
Escudero, who chairs the Senate committee on banks, financial institutions, and currencies, noted that globalization “has increased the integration of financial markets and the scope of operations of financial institutions has evolved.”
“Undoubtedly, there is a need to respond to contemporary challenges in order that the BSP shall remain effective in its conduct of monetary policy and supervision of entities within the financial system,” the senator added.
Once the bill is enacted into law, the increase in BSP’s capitalization will be funded through the “retention of declared dividends and taxes due to the national government.”
Moreover, the sufficiency of the P200 billion capitalization will be reviewed every five years and will be adjusted “upon joint recommendation” of the Finance, and Budget and Management secretaries together with the Monetary Board.
The said measure also calls for the BSP to supervise over the operations of banks and exercise regulatory and examination powers over quasi-banking operations.
Meanwhile, the Monetary Board will authorize, regulate and “have examination powers entities or persons to engage in money service businesses,” under the measure.
The bill will also increase the number of the BSP deputy governors from three to five “to have a more responsive leadership in a complex institution,” Escudero said. /ee
READ: Hike in BSP capital to P200B pushed