The Monetary Board (MB) approved the implementing guidelines of the Currency Risk Protection Program Facility (the CRPP Facility) under Circular No. 1014.
The implementing guidelines set the mechanics, pricing, and requirements of the CRPP Facility. The availment process of the CRPP Facility has been rationalized to facilitate access to the same.
The documentation needed to support an application to avail of the Facility has been simplified in line with the BSP’s efforts to liberalize the foreign exchange market. Said documents need not be submitted to the BSP but shall be made available to the BSP during on-site examination or off-site verification, if necessary.
Meanwhile, daily reporting requirement on executed and pre-terminated CRPP contracts has also been dispensed with. In lieu of the same, U/KBs shall be required to submit to the BSP notarized certification and deed of undertaking stating that the bank’s CRPP transactions are in compliance with the regulation. Corresponding sanctions have been prescribed to promote adherence to the CRPP guidelines.
Importantly, banks are expected to conduct the necessary client suitability assessment procedures, discuss the product information, and disclose the risks and costs associated with the non-deliverable FX forward transaction and the CRPP Facility with their clients.
The enhanced CRPP Facility is an avenue for bank clients to hedge their eligible foreign currency obligations.