The central bank is urging Congress to prioritize several pending bills which, it said, would buttress the country’s chances of staging a strong economic recovery next year once the effects of the ongoing coronavirus pandemic wanes.
In an online briefing on Tuesday, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Francisco Dakila Jr. echoed the regulator’s support for the passage of key legislative proposals that would help the country regain its footing from the worst gross domestic product contraction in recorded history.
According to the official, these important measures include the pending amendments to Republic Act Nos. 1405 and 6426—the laws pertaining to the secrecy of bank deposits.
Current bank secrecy laws in the country are among the most rigid in the world, and have been cited for foreign financial agencies as an added cost and a deterrent to investments, given the reputational risk for overseas parties of transacting with local entities.
Dakila said it was also important to amend RA No. 9510, or the Credit Information System Act. These amendments will strengthen the thrust toward developing a more comprehensive credit database among all the borrowers in the country, thus ensuring that borrowers with good credit standings get to enjoy cheaper cost of funds, while those with poor records get to bear the cost of higher rates.
At present, the sharing of information among financial institutions about their respective borrowers is limited, leading many lenders to impose a flat interest rate among most retail borrowers—a scheme that effectively penalizes even those with good credit risk with the burden of paying for the losses incurred to bad borrowers.
The central bank deputy chief also said the regulator wanted Congress to amend RA No. 10000, or the Agri-Agra Law to encourage banks to lend more to the agricultural and agrarian reform sectors.
The BSP said the country also needs a financial consumer protection law, especially with the increased use of digital channels for investments and retail transactions that are also spawning higher incidences of fraud targeting unsuspecting users. INQ