The Bangko Sentral ng Pilipinas (BSP) will permanently adopt as policy some of the foreign exchange (FX) pandemic-related relief measures to make it easier for banks to sell and transact FX.
BSP Circular No. 1171, signed on March 29 after a Monetary Board resolution it approved on March 23, further amends FX regulations by permanently relaxing documentary requirements and extending the waiver of monetary penalties until end-June 2023 for delays incurred in the submission of reports.
To be adopted as permanent policy are the majority of the operational relief measures for FX transactions under Circular No. 1080 which was first issued on March 27, 2020, and other related Circular Letters.
Meanwhile, the BSP said it will “unwind the remaining temporary measure” as a response to Covid-19 three years ago. It did not specify which of these relief measures will be removed.
“The amendments are in line with the BSP’s thrust to further streamline procedures and documentary requirements for FX transactions,” said the BSP.
Two of the six FX relief measures that will be permanently adopted are: the lifting of the notarization requirement for certain supporting documents for trade and non-trade current account transactions and foreign investments; and the lifting of the applicable processing fee in relation to non-compliance with prescriptive period for submission to BSP International Operations Department (IOD) of applications/requests for various FX transactions.
Other relief measures that have become permanent include: the issuance in electronic form of BSP-IOD documents such as BSP letter of approval and Bangko Sentral Registration Document (BSRDs); the electronic submission of BSP-IOD issued documents to authorized agent banks (AABs)/AAB subsidiary or affiliate FX corporations and to the BSP; electronic submission of BSP-IOD application forms without the required electronic/digital signatures, provided that same will be accompanied with the required attestation from the submitting party; and the electronic submission of reports to BSP-IOD.
“Relatedly, documents issued by the BSP-IOD in electronic form starting 27 March 2020 (e.g., BSP letter-approval, provisional BSRDs) will remain valid even after the period covered by Circular No. 1080. Hence, the BSP will no longer issue original hardcopies to replace said BSP documents,” said the BSP.
The BSP since 2007 has approved and completed 12 rounds of FX policy liberalization. Amending the FX rules from time to time ensure that it remains appropriate to the needs of a dynamic and expanding local economy. Updating FX rules will also support regional integration with regional and global markets, and enhance data capture on FX transactions.
In the last five years or so, the central bank has been reviewing its policy on the cross-border transfer of local and foreign currencies as well as amendments to other FX regulations such as reporting guidelines, among others.
Last year, in a proposed circular, the BSP said it will slap a P1 million penalty for the misreporting FX transactions and other violations of FX rules to protect the local currency and maintain price stability.
The P1 million penalty is part of amendments the BSP is proposing in its FX regulations on reporting guidelines and penalty provisions.
Under the BSP law, violators to the FX rules may be imposed a maximum monetary penalty of P1 million for each transactional violation or P100,000 per calendar day for violations of a continuing nature.
The BSP is also proposing to impose monetary penalties singly or in combination with non-monetary sanctions, if appropriate.
A revised circular on penalties covering FX transactions or its reporting have yet to be issued.
The BSP defines failed reporting as erroneous, delayed and unsubmitted reports which will have its corresponding penalties for violating the reporting standards.