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Bangko Sentral loosens forex rules

April 18, 2013 5:53pm

Filipinos will soon be able take more dollars out of the country for travel, education, medical and other non-trade purposes with the Bangko Sentral ng Pilipinas set to implement a fresh wave of foreign exchange liberalization measures, officials said Thursday.

The measures, which also expand the types of overseas investments Filipinos can put their money into, are expected to “temper” a strong peso that has worried both the central bank and the national government.

Bangko Sentral officer-in-charge and Deputy Governor Nestor Espenilla, Jr. told the media the “new rules aim to further simplify foreign exchange transactions of the general public with banks.”

Included in the new rules is the increase in the amount of dollars that may be sold over the counter by banks and money changers to residents without documentation for services transactions.

Now, Filipinos can buy $120,000 (roughly P4.9 million) from an earlier $60,000 (P2.5 million), according to the new rules, which will take effect 15 days after publication in a nationally circulated newspaper.

This is the sixth in a series of reforms instituted by the central bank since 2007.

“Residents can now buy a higher amount of foreign exchange to meet the rising costs of education and medical bills incurred offshore, foreign travel, and other services, without the need of documentation,” said Espenilla.

The central bank will also increase the amount of dollars that may be bought by balikbayans and non-residents using unspent pesos to $10,000 (P410,000) from $5,000 (P205,000). 

Expatriates with contracts of less than a year, foreigners who service Filipino clients, and foreign exchange students may also open a peso account, said Wilhelmina Mañalac, Bangko Sentral managing director for the international sub-sector. 

Mañalac said the central bank has expanded the types of offshore investments Filipinos and home-grown companies can place funds into.

Additions include non-peso global, mutual and unit investment trust funds, inter-company loans, real property like condominiums, debt papers, and stocks listed abroad.

The main intention is to “create a responsive and appropriate regulatory environment,” Mañalac said. At the same time, foreign exchange liberalization will stem the strengthening peso, which has appreciated steadily in the past year.

“With this, outward flows of funds are expected as certain restrictions are lifted,” she said.

While the Bangko Sentral does not target a certain exchange rate, its is known to be biased toward a weaker peso. A stronger peso curbs spending power of families of overseas Filipino workers, and cuts earnings of exporters.

“The BSP shall likewise remain vigilant and stand ready to act to keep the foreign exchange market stable,” Espenilla noted. — VS/BM, GMA News
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