BSP clarifies new forex policy

This refers to “BSP’s dollar gambit” by Daxim L. Lucas that appeared in Biz Buzz (7/9/18), where we noted the following statements: (a) the central bank did not state the rationale behind a temporary registration window and that it went largely unnoticed by the public; and (b) the policy was a result of the central bank getting worried that it no longer has a reliable picture on the amount of dollars circulating in the economy, without documentation.

In this regard, the Bangko Sentral ng Pilipinas (BSP) would like to make the following clarifications:

1) It is not true that the BSP did not indicate the rationale for the temporary registration window, or that the public was not informed of the new policy. On Dec. 22, 2017, when the BSP announced, through media releases, further liberalization of foreign exchange (forex) rules which included, among others, the opening of a temporary window for six months, it was explicitly stated that the initiative is intended to widen the coverage of the BSP’s records on the country’s external obligations to support policy review and formulation, analysis and statistical needs.

Accordingly, BSP Circular No. 985 was issued on Dec. 22, 2017, and became effective on Jan. 15, 2018. The circular was posted on the BSP website, and published in the Philippine Star on Dec. 28, 2017, for information of the general public. Thus, the new policy was made known to the public as early as December 2017.

2) It is not true that the BSP is worried that it no longer has a reliable picture of the amount of dollars circulating in the economy, hence the issuance of this new policy. We wish to note that the new policy was rather intended to ensure greater and easier access to forex resources in order to help support and spur economic activities in the country. This was done with due recognition of the continuing volatility in the external financial markets at the time.

3) On June 29, 2018, the BSP issued a press release, “Reminder on the temporary window for registration of private sector foreign loans/borrowings,” which intended to
remind the public of the deadline for filing of applications for registration of foreign loans under BSP Circular No. 985 on July 15, 2018.

DIWA C. GUINIGUNDO, Deputy Governor, Bangko Sentral ng Pilipinas