BSP seeks P150B add'l capital in proposed Charter amendments

The Bangko Sentral ng Pilipinas is batting for a fourfold increase in its working capital to better employ measures safeguarding the financial system and maintaining price stability as well as ease balance sheet pressures, a ranking central bank official said Saturday. 

 

In a lecture with the media Saturday, Bangko Sentral Deputy Governor Vicente Aquino said the central bank is seeking additional P150 billion capital, payable in three years, bringing it to P200 billion. 

 

The capital hike was included in a list of amendments to the Bangko Sentral’s charter, which monetary authorities put forward to both houses of the 16th Congress. 

 

“The strength of the nation’s central monetary authority reflects the condition of its economy,” Aquino said.

 

Central bank officials have pushed for amendments to Republic Act No. 7653 or the New Central Bank Act of 1993 in the 15th Congress, but this was never passed.  

 

This, even as it was drafted in the administration’s Legislative Executive Development Advisory Council (LEDAC).

 

Aquino said the central bank has put the total P150 billion capital infusions in the list of amendments it submitted for consideration of drafting into the LEDAC.  

 

The New Central Bank Act implemented in 1993 mandated that the government infuse P50 billion in capital to the Bangko Sentral.

 

Of the P50 billion, only P40 billion has so far been given to the Bangko Sentral. Last year, the government infused P20 billion to the central bank. Previous tranches each worth P10 billion were given in 2011 and 1993.

 

Aquino said the current capital is not enough to covering evolving needs to the financial sector. 

 

“The scale and complexity of the responsibilities of the BSP have been magnified by the growth of the Philippine economy and the expansion of its financial system,” said Aquino. 

 

“The conduct of monetary policy involves a range of financial risks and costs that result from policy decisions by the BSP,” he added. 

 

Capital infusions are seen to help the central bank’s recuperation from losses incurred from protecting the local currency and ensuring price stability.  

 

The Bangko Sentral has been in the red for at least three years. – KDM, GMA News