BSP Governor Amando M. Tetangco, Jr. announced today that as part of continuing efforts to keep regulations appropriate for the changing needs of the Philippine economy and following the thrust towards greater openness in view of the country’s increasing integration with global markets, the BSP continues to review its existing regulations, particularly those governing transactions in foreign exchange (FX).
In this connection, the Monetary Board approved the following:
a. Increase in the amount of FX that Philippine residents may purchase from the banking system without supporting documentation (other than an application to purchase FX) for legitimate transactions from USD120,000 to USD500,000 (for individuals) and USD1 million
This policy aims to enhance and further facilitate access to FX of both individuals and corporates for legitimate non-trade current account transactions.
b. Allowing of the deposit by Philippine residents of FX purchased from banks for certain underlying transactions (such as for travel abroad and payment of certain obligations to non-residents) into their Foreign Currency Deposit Unit (FCDU) accounts, prior to outward remittance to the intended non-resident beneficiaries.
This shall provide residents with greater flexibility in managing their cash flows as well as provide greater ease in transacting in FX.
c. Lifting of the prohibition on the sale of FX by banks and their forex corporations for resident-to-resident transactions.
This measure will facilitate payment by residents of obligations to their resident counterparties and allow further diversification of residents’ investments.
d. Lifting of prior BSP approval and registration requirements for private sector loans to be obtained from FCDUs/Expanded FCDUs of banks
This is in line with the BSP’s thrust to facilitate access of the private sector to bank financing.
The Board also approved the increase in the amount of legal tender Philippine currency that may be brought into/out of the country from PHP10,000 to PHP50,000. This intends to provide greater convenience to travelers to and from the Philippines, and allow settlement of obligations in jurisdictions outside the Philippines where the Philippine Peso is accepted as a currency of settlement.
The implementing circular for these policies will be issued to take effect on 15 September 2016. Notwithstanding the liberalized rules, banks are expected to continue to adopt safe and sound practices in their FX transactions and dealings with clients/other counterparties. The BSP, for its part, will remain vigilant and stand ready to act to keep the FX market stable.