The BSP’s mandate on international operations under the purview of the International Operations Department is to support the promotion and maintenance of price stability, external sustainability, and the integrity and value of the Philippine peso through the effective management of external debt, foreign investments and other foreign exchange (FX) transactions.
Such mandate is supported by the 1987 Philippine Constitution and various issuances, regulations and laws such as the Foreign Borrowings Act [Republic Act (R.A.) No. 4860, as amended], the BSP Charter (R.A. No. 7653, as amended by R.A. No. 11211) and the Foreign Investments Act (R.A. No. 7042).
Policies on FX transactions facilitates access to FX resources of the banking system to: (a) support business activities conducive to a stable FX market; (b) enhance the business climate to become more conducive for investments; (c) support the promotion of portfolio and risk diversification by investors; (d) support greater integration of the country with international markets, by facilitating orderly cross-border capital flows; and (e) align, where possible or appropriate, existing policies with international standards and those of neighboring countries, taking into consideration prevailing economic conditions, both in the domestic and international markets.
The BSP remains steadfast in managing the country’s external debt through facilitation of Monetary Board’s approval of public sector and publicly-guaranteed private sector foreign/foreign currency loans/borrowings, and registration of private sector foreign/foreign currency loans/borrowings. External debt management is primarily done to: (a) keep external debt stock within the country’s capacity to service in a timely and orderly manner; and (b) assess the implications of financing/credit proposals on monetary aggregates, balance of payments, international reserves, key debt indicators and the FX market, and propose appropriate measures (as needed)
The registration of foreign investments with the BSP is optional. The BSP registers foreign direct investments, foreign portfolio investments and other forms of foreign investments to facilitate access to FX resources of the banking system for the repatriation of capital and/or the remittance of related earnings in pesos thereon, while ensuring that it remains supportive of the country's thrust to promote a policy environment conducive to a sustained inflow of foreign investments to help foster economic development and growth.
The BSP monitors and analyzes capital flows related to external debt and investments to determine the magnitude of FX requirements of the economy and the impact of such capital flows on macroeconomic variables, and for BSP’s various purposes including policy formulation, projections, and planning for capital flows and statistics.
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