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BSP Warns Against Dollar Hoarding

02.07.2003

The Bangko Sentral ng Pilipinas (BSP) toward warned banks with foreign currency deposit units and affiliated forex corporations to ensure strict compliance with the circulars requiring full documentary support for sales of foreign exchange.

In a circular-lettter addressed to all authorized agent banks and their affilate forex corporations, BSP Officer-in-Charge Alberto V. Reyes said “ this is to remind all concerned that sales of foreign exchange are subject to the documentary requirements under the attached Circular Letters dated August 9,2001 and January 21, 2002.”

The BSP issued the warning as it noted an unusual demand for foreign exchange caused possibly by concerns over continuing tension in the Middle East.

The OIC said that starting today, the BSP examiners will be reviewing day-to-day forex sales of all commercial and universal banks to ensure that they are complying with the BSP circulars. All documents supporting the sale of foreign exchange shall be made available for verification by BSP examiners.

The OIC said violators of the circulars will be subjected to fines and administrative penalties as provided under BSP guidelines. If necessary, the names of the violators will also be made public.

Circular Letters issued Aug. 9, 2002 and January 23, 2002 prescribe the minimum documentation required for the sale of foreign exchange for trade and non-trade purposes, respectively. Non-trade purposes include travel funds of permanent residents of the Philippines, educational expenses, medical expenses, support of dependents abroad, salary of foreign expatriates, royalties, etc.

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