By Ben R.Rosario
The House of Representatives has approved on second reading a bill proposing to further strengthen the supervisory and regulatory powers of the Bangko Sentral ng Pilipinas (BSP), while increasing its capitalization to 400 percent of its current principal.
Reps. Ben Evardone (PDP-Laban, Eastern Samar) and Henry Oaminal (PDP-Laban, Misamis Oriental) said third reading approval of House Bill (HB) 7742 should be expected as soon as regular session resumes next month.
Evardone, chairman of the House committee on banks and financial intermediaries, and Oaminal are principal sponsors of the measure.
Evardone said HB 7742 seeks to amend a number of key provisions of Republic Act 7653 or the New Central Bank Act, significant of which is the increase of the BSP’s capitalization from R50 billion to R200 billion.
He said the legislative proposal will reinforce BSP’s capital viability, strengthen its monetary stability functions and enhance its regulatory powers.
HB 7742 also restores the tax exemption privilege of the BSP and its authority to obtain data from private persons or entities.
The bill also considered the exigencies of maintaining sound and progressive financial management by allowing the Monetary Boar to conduct meetings through modern technologies such as teleconferencing and video conferencing.
Under the bill the BSP is also tasked to promote financial stability and closely work with other relevant agencies such as the Securities and Exchange Commission, the Insurance Commission, the Philippine Deposit Insurance Commission and the national government.
HB 7742 authorizes the Monetary Board to “summarily and without need for prior hearing” forbid banks or quasi banks from doing business. Such authority may also be exercised over non-stock savings and loans association.
To guarantee the gathering of better intelligence information against bank frauds and finance-related criminal activities, the BSP will be authorized to grant informer’s reward which must not exceed R1 million.
A new section provides that lower courts will be prohibited from issuing injunctive relief against BSP actions.
Oaminal said the legislative measure enhances the BSP’s supervisory authority by eexpanding the entities it will supervise to include other categories of financial institutions.
He revealed that the bill provides BSP the flexibility to establish loss allowances and create reserve buffers against future risk and contingency.
The bill likewise empowers the Monetary Board to authorize entities or persons to engage on money service businesses.
While the BSP is exempted from national, provincial, municipal and city taxes on income derived from its governmental functions, profits considered as propriety income are not free from tax imposition.