BIZ BUZZ: ‘Crackdown’
It is tempting to think that the Bangko Sentral ng Pilipinas (BSP) has been doing nothing to temper the peso’s fall against the US dollar and has adopted a completely laissez-faire approach to currency markets. But, behind the scenes, nothing could be further from the truth.
Biz Buzz learned—and confirmed from official sources—that the monetary regulator had begun cracking down on what it felt was banks’ speculative market activity which saw the local currency drop to 59 against the greenback in recent days.
Ok, maybe “crackdown” is too harsh. Let’s call it a more forceful form of moral suasion, instead. But unlike the garden variety moral suasion (where BSP officials call bank officials and “strongly suggest” that they lay off the market), the current variety involves some scary police-like tactics.
Prior to the peso’s episodes of volatility, banks were free to submit supporting documents for their peso-dollar trades after the transaction was settled. These rules were, after all, relaxed in recent years to counter what was then an opposite problem: a peso that was too strong.
Nowadays, however, the BSP has ordered banks to submit supporting documents within 15 minutes of their executing foreign exchange (FX) trades. This applies to all trades above $100,000.
Well and good, but what’s gotten bankers worried is that this new policy is being made without the benefit of a formal memorandum from the BSP. Everything is being done informally without documented orders.
“They deregulated the market. So what we’re doing isn’t illegal. They’ve been allowing us to do things this way for years now. Now they’re tightening regulations, but they couldn’t show us the order,” said one market participant.
“We’re just checking for compliance, given the market’s volatility,” countered a BSP official. “Transactions have to have underlying documents. If the BSP is not satisfied, we can ask for additional [supporting documents].”It’s not a crackdown, per se, but it’s definitely not a witch-hunt, the official assured.
Well, we’re not sure how that explanation would go down with some bankers doing the actual trades. In a few instances these last few days, the BSP actually sent auditors to banks’ trading rooms to monitor their trades. One auditor did nothing all day except sit right beside the trader, not asking questions, not asking for documents … just watching.
For now, the FX market seems to have calmed down, perhaps partly due to this new BSP policy. But how long until the banks revolt? Abangan!
—Daxim L. Lucas
‘Most beautiful’ McDonald’s to rise in Bacolod
Scheduled to open today in Bacolod City is McDonald’s The Upper East, which promises to be the country’s “most beautiful McDonald’s” because of its unique design and store concept.
Situated inside Megaworld’s 34-hectare The Upper East township, it is the latest in the string of Megaworld-owned McDonald’s stores, following McDonald’s Capital Town in Pampanga (popularly known as the Philippines’ “biggest McDonald’s”) and McDonald’s Forbes Hill (first McDonald’s NXTGen store in the entire Negros).
Bacolod City Mayor Albee Benitez together with McDonald’s Philippines president Kenneth Yang and managing director Margot Torres and Megaworld chief operating officer Lourdes Gutierrez-Alfonso will lead the opening of the store. Bacolod City’s world-famous Masskara Festival inspires the exterior of the store, which is why there are giant masskaras crafted by renowned Bacolod mask maker Jojo Vito as part of the store’s façade.
The store’s overall design follows the Ray Palette, the fast food giant’s latest global design scheme standard that puts emphasis on space and lighting. At night, decorative lights illuminate the store to give it a glowing outline.
The list goes on, enough to give the people of Bacolod yet another reason to smile.
—Tina Arceo-Dumlao INQ
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