BSP urges Congress to pass key reforms to boost post-pandemic PH economy
MANILA, Philippines—Banking regulators are working closely with both chambers of Congress for the passage of key legislative measures and financial sector reforms that will promote economic recovery and sustained inclusive growth, according to the head of the central bank.
At a press briefing, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said the aim of this undertaking is “to strengthen the financial system, foster financial inclusion, enhance the delivery of financial services, address social issues related to access to financial products and services, and support economic growth amid the pandemic.”
The BSP is the main proponent of these proposed laws:
Amendment to Republic Act No. 1405, which provides for bank secrecy
Proposed Financial Institutions Strategic Transfer (FIST) law
Amendments to laws on agriculture and agrarian reform
Proposed Financial Consumer Protection Act
The BSP is also supporting passage of the proposed Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery Act (GUIDE).
It is coordinating with the Department of Finance, Bureau of Treasury, Land Bank of the Philippines and Development Bank of the Philippines on the proposed GUIDE.
The FIST bill has been approved on third reading by the Senate and House of Representatives and is up for bicameral conference deliberation.
The proposed Financial Consumer Protection Act and agri-agra bills had been approved on third reading by the House and being deliberated at the committee level by the Senate.
The proposed Financial Consumer Protection Act sets a clear legal mandate and a comprehensive financial consumer protection framework in the Philippines. These included financial inclusion, education, good governance and effective supervision.
The proposed relaxation of bank secrecy rules would allow the BSP to look into and examine bank records for special circumstances. It would allow the regulators to effectively fulfill their mandates and allow them to examine banks to cover all risk areas in the assessment of banks’ financial conditions and risk management systems.
The proposed FIST law will allow financial institutions to free up much-needed liquidity for lending to productive sectors of the economy crucial to economic recovery. The bill encourages banks to sell non-performing assets to third-party buyers by giving tax exemptions and other fiscal incentives on certain transfers of bad loans.
The GUIDE bill, on the other hand, is on its second reading at the House of Representatives and being deliberated at the committee level at the Senate.
The bank secrecy amendment bill is at the committee level in both chambers of Congress.
“The BSP regularly conducts consultations and dialogues with lawmakers, technical experts, and concerned stakeholders to ensure that all issues relative to the legislative measures are adequately addressed,” Diokno said.
