Over the past years, the Bangko Sentral ng Pilipinas (“BSP”) has undertaken various liberalization measures to ease foreign exchange regulations and facilitate foreign exchange transactions by banks, international and domestic corporations, Filipinos working and living abroad, and the public in general. In particular, the amendments under Circular No. 1171 are expected to have a significant impact on the foreign exchange market in the country. These amendments to foreign exchange regulations are in line with the regulator’s thrust to further streamline procedures and documentary requirements for foreign exchange transactions. While these amendments broadly seek to ease the requirements on foreign currency financing, these changes will also help prevent money laundering and other financial crimes.
One of the key amendments introduced by Circular No. 1171 is the relaxation of the rules on foreign currency loans and borrowings. Under the new circular, non-residents will now be allowed to borrow foreign currency from residents without the need for prior approval from the BSP. This amendment is expected to make it easier for businesses to access foreign currency financing.
Another key amendment is the simplification of the rules on foreign investments. Under the new circular, non-residents will now be able to register their foreign investments with the BSP through a single form. This simplification is expected to make it easier for businesses to invest in the Philippines.
In addition to these key amendments, the BSP also adopts the following:
- Issuance in electronic form of BSP – International Operations Department (“IOD”) documents [e.g., BSP letter-approval, Bangko Sentral Registration Document (“BSRD”)] making all the issued electronic BSRD form valid even after the period covered by Circular 1080. In relation, BSP shall no longer issue original hardcopies to replace said BSP documents;
- Electronic submission of BSP-IOD issued documents to authorized agent banks (“AABs”)/AAB subsidiary or affiliate forex corporations (“AAB forex corps”) and to the BSP;
- Electronic submission of BSP-IOD application forms without the required electronic/digital signatures, provided that same shall be accompanied with the required attestation from the submitting party;
- Electronic submission of reports to BSP-IOD;
- Lifting of the notarization requirement for certain supporting documents for trade and non-trade current account transactions, and foreign investments; and
- Lifting of the applicable processing fees, penalties, and dues in relation to non-compliance with period for submission to BSP-IOD of applications/requests for various FX transactions.
The BSP has stated that these amendments are aimed at promoting a more efficient and transparent foreign exchange market. The BSP believes that these amendments will help to attract more foreign investment and boost the economic growth in the Philippines.
This article is for informational and educational purposes only. It is not offered and does not constitute legal advice or legal opinion.
Sittie Namraidah L. Ali is an associate of the Corporate and Special Projects Department of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).