MANILA, Philippines — After a breach of money laundering laws last February, the Bangko Sentral ng Pilipinas relaxed foreign exchange rules anew on Friday in what is seen as part of efforts to bring the public back to the banking system.
The five eased measures, the central bank said, is also part of efforts to make sure there is continuous flow of credit in the financial system to support economic growth.
“(This is) part of continuing efforts to keep regulations appropriate for the changing needs of the Philippine economy…,” BSP Governor Amando Tetangco Jr. said in a statement.
“(It follows) the thrust towards greater openness in view of the country’s increasing integration with the global markets,” he added.
The measures were announced barely a week after the BSP slapped a record P1-billion fine against Rizal Commercial Banking Corp. for its participation on the $81-million bank heist in Bangladesh last February.
The last time rules were relaxed was that month.
Topping the list of measures was to allow Philippine residents– which includes both natural-born Filipinos and foreigners residing here– to purchase up to $500,000 in foreign exchange “without supporting documentation.”
This was up more than four times the original $120,000-cap. For companies, the limit was at a higher $1 million.
Travellers are now also allowed to deposit foreign exchange they purchased from banks for their use abroad into their foreign currency deposit unit (FCDU) accounts, BSP said.
Legal tender that may be brought in and out of the country was also hiked to P50,000 from just P10,000.
“This intends to provide greater convenience to travelers to and from the Philippines and allow settlement of obligations in jurisdictions outside the Philippines,” the central bank said.
The prohibition on selling other currencies by banks to corporations for transactions onshore was also lifted.
Loans coming from FCDUs may also be availed without prior registration or BSP approval.
“This is in line with the BSP’s thrust to facilitate access of the private sector to bank financing,” it said.
Sought for details, BSP Deputy Governor Nestor Espenilla Jr. did not categorically say if the measures were part of what he earlier said were efforts to channel more funds back to the banks.
“Foreign exchange liberalization is beneficial to the economy in its own right,” he said.
The BSP wanted the public to course more of their money to banks than other financial institutions such as remittance centers since it could easily monitor lenders.
Last May, Espenilla said measures were underway to ease foreign exchange and documentary requirements on sending money abroad to lure depositors back to the banks.
Tighter regulations, meanwhile, are being eyed for pawnshops and remittance centers.
“Notwithstanding the liberalized rules, banks are expected to continue to adopt safe and sound practices on their foreign exchange transactions and dealings with clients/other counterparties,” BSP said.