BSP urges Congress to pass key reforms to boost postpandemic PH economy
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.
In a press briefing, Bangko Sentral ng Pilipinas (BSP) Gov. Benjamin Diokno said the aim of this undertaking was “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 the bank secrecy bill (amending Republic Act No. 1405), the Financial Institutions Strategic Transfer (Fist) bill, amendments to the Agri-Agra Law and the proposed Financial Consumer Protection Act.
The BSP also supports the passage of the Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery Act (Guide bill) and is coordinating with the Department of Finance, Bureau of the Treasury, Land Bank of the Philippines and Development Bank of the Philippines in this regard.
The FIST bill has been approved on third reading by the Senate and the House of Representatives and is up for bicameral conference deliberation. The Financial Consumer Protection and Agri-Agra bills, meanwhile, have been approved on third reading by the Lower House and being discussed at the committee level by the Senate.
The proposed financial consumer protection law sets forth a clear legal mandate and comprehensive financial consumer protection framework in the country, which includes financial inclusion, education, good governance and effective supervision.
Meanwhile, by giving authority to the BSP to look into and examine bank deposit information under specified circumstances, the proposed relaxation of the deposit secrecy law will allow regulators to effectively fulfill their mandates and allow them to fully examine banks so that all risk areas will be considered in the assessment of their financial conditions and risk management systems.
The proposed FIST law, on the other hand, will allow financial institutions to free up much-needed liquidity for lending to the productive sectors of the economy crucial to economic recovery. This bill encourages banks to sell their nonperforming assets to third-party buyers by giving tax exemptions and other fiscal incentives on certain transfers of these 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. Moreover, the bank secrecy 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.
