BSP gets funding boost from gov’t

Malacañang is infusing an additional P10 billion into the Bangko Sentral ng Pilipinas, bringing the government’s equity contribution to P20 billion which is, however, still short of the P50 billion committed under the law.

Budget Secretary Florencio B. Abad said the additional capital should shore up the central bank’s capacity to carry out its price stabilization functions.

Abad said the fund should also expand the BSP’s rediscounting facility for priority projects that would stimulate economic activity.

“We have to support the BSP in strengthening its capacity to pursue swiftly and decisively the necessary policy actions without being limited by concerns over balance sheet weaknesses,” he said.

Under the law that created the BSP following the bankruptcy of the Central Bank of the Philippines, Malacañang shelled out the first P10-billion equity in 1996.

On top of the infusion into BSP, the Department of Budget and Management also released P1.04 billion to three state firms—Trade and Investment Development Corp. (Tidcorp), Home Guaranty Corp. (HGC) and Credit Information Corp.—“to strengthen their capability to perform their roles in the financial market.”

Abad said that P570 million would go to Tidcorp as government capitalization.

“Tidcorp, formerly known as the Philippine Export-Import Credit Agency, needs to strengthen its capital base to be able to perform its mandate of providing financial assistance to enterprises engaged in international trade,” he said.

Some P400 million goes to HGC for its credit insurance and mortgage guarantee operations.