Senate OKs bill increasing BSP’s capitalization to P200 billion

Voting 15-0, the Senate passed on third and final reading Monday a bill increasing the capitalization of the Bangko Sentral ng Pilipinas (BSP) from P50 billion to P200 billion.

Senate Bill No. 1297 is expected to "strengthen the tools which the BSP exercises in performing its mandates, supplement the mechanism in protecting the savings of depositors and in ensuring the smooth flow of transactions in the financial system, as well as to enhance the corporate viability of the BSP," as Senator Francis Escudero described in his sponsorship speech last year.

In his speech, Escudero said that the country's "economic milieu" has changed in the two decades since the BSP was established to replace the old central bank.

“Undoubtedly, there is a need to respond to contemporary challenges in order that the BSP shall remain effective in its conduct of monetary policy and supervision of entities within the financial system,” said Escudero, who is also the chairman of the committee on banks, financial institutions, and currencies.

Once signed into law, the payment of the increase in the capitalization shall be funded through the retention of declared dividends and taxes due to the national government.

The adequacy of the P200 billion capitalization shall be subject to review every five years, and will be adjusted upon joint recommendation of the BSP's Monetary Board as well as the Finance and Budget Secretaries.

Aside from providing policy directions in the areas of banking and credit, the bill calls for the BSP to have supervision over the operations of banks and exercise such regulatory and examination powers over quasi-banking operations.

The Monetary Board, under the bill, shall likewise be allowed to authorize, regulate, and have examination powers over entities or persons engaged in money service businesses.

One of the salient features of the bill is a provision increasing the number of the BSP deputy governors from the present three to five. 

The bill's other authors are Senate President Pro Tempore Ralph Recto, Minority Leader Franklin Drilon, Senator JV Ejercito, and Senator Sonny Angara. — BM, GMA News