PART ONE. RULES ON FOREIGN EXCHANGE TRANSACTIONS
- Regulations governing foreign exchange transactions are hereby consolidated in this Manual of Regulations on Foreign Exchange Transactions hereinafter referred to as the “Manual”.
- All foreign exchange transactions, including those of authorized agent banks (AABs)/
AAB-subsidiary/affiliate forex corporations (AAB-forex corps), must be compliant with applicable laws, rules and regulations, including the “Know Your Customer” policy.
- The sale of foreign exchange may be freely made: (a) between and among AABs; (b) by AAB-forex corps to AABs; and (c) between and among individuals/entities other than AABs/AAB-forex corps: Provided, that the sale of foreign exchange by non-bank BSP-supervised entities (NBBSEs), including qualified entities operating as foreign exchange dealers/money changers (FXDs/MCs) and remittance agents (RAs) that are neither AABs nor AAB-forex corps, shall be governed by other applicable BSP regulations, including Circular No. 471 dated 24 January 2005, as amended, and shall not be covered by this Manual.
- The rules on foreign exchange that may be sold and the related documentary requirements shall apply to the sale of foreign exchange by AABs/AAB-forex corps to individuals/entities that are not AABs.
- For (a) registration of private sector foreign loans/borrowings without public sector guarantee; (b) registration of inward investments; and (c) sale of FX by banks covering various FX transactions, the supporting documents4 may be submitted through electronic means5 to the BSP or AABs/AAB forex corps; Provided, the submitting party shall attest to the: (a) integrity and authenticity of the submitted documents; (b) transmittal of the supporting documents made via official channel; and (c) availability of the hard copy of original/photocopy of documents upon request by the BSP for verification. Hard copy of the documents submitted electronically shall be retained for a period of five (5) years from the time of submission thereof.
- All sales of FX by AABs/AAB forex corps under the FX Manual for settlement of FX transactions are subject to the submission by the FX purchaser of a duly accomplished Application To Purchase Foreign Exchange using the prescribed form (Annex A).
Duly accomplished application form (Annex A), as well as supporting documents for sale of FX by AABs/AAB forex corps, may be submitted in accordance with Item 5 above. AABs/AAB forex corps/transacting parties shall make available the original/electronic/ digital/photocopy (as applicable) of documents upon request by the BSP for verification.
- The seller/remitter of foreign exchange shall ensure that applicable Philippine taxes related to the foreign exchange transactions [including those applicable to the following: (a) sale of foreign exchange; (b) remittance of foreign exchange; and (c) the underlying foreign exchange transaction] have been paid and the remittance is net of such taxes. For this purpose, the seller/remitter of foreign exchange shall require submission by the purchaser of foreign exchange of receipt(s)/evidence of payment of taxes, where applicable.
- The terms used herein are as defined in the “Glossary of Terms” hereof unless otherwise indicated in specific sections of this Manual.
PART TWO. CURRENT ACCOUNT TRANSACTIONS
NON-TRADE FOREIGN EXCHANGE RECEIPTS AND DISBURSEMENTS, CROSS-BORDER TRANSFER OF LOCAL AND FOREIGN CURRENCIES, AND GOLD TRANSACTIONS
Section 1. Disposition of Foreign Exchange Receipts. Foreign exchange receipts, acquisitions or earnings of residents from non-trade sources may be used freely for any purpose. Such proceeds may, at the option of said residents, be sold for pesos, retained or deposited in foreign currency accounts, whether in the Philippines or abroad.
Resident shall refer to:
- an individual citizen of the Philippines residing therein; or
- an individual who is not a citizen of the Philippines but is permanently residing7 therein; or
- a corporation or other juridical person organized under the laws of the Philippines; or
- a branch, subsidiary, affiliate, extension office or any other unit of corporations or juridical persons which are organized under the laws of any country and operating in the Philippines, except OBUs.
Non-resident shall refer to an individual, a corporation or other juridical person not included in the definition of resident.
4 Except for the following documents which are required to be presented/submitted in hard copies: (a) BSP-issued documents (e.g., BSP Approval, Bangko Sentral Registration Document); and (b) Annex N of the FX Manual
5 (a) BSP - through the Foreign Loan Approval and Registration System (for registration of foreign loans/borrowings) and to email@example.com (for registration of inward investments); and (b) AABs/AAB forex corps – through official email/electronic/digital channel/system designated by banks subject to their due diligence/”Know Your Customer”/risk management policies. The BSP will accept no responsibility for electronic messages that may be hacked or cracked, intercepted, copied or disclosed (without authorization) outside BSP’s information system.
7 Residents include any individual, citizen or otherwise, who has resided in the Philippines for a year or longer, as defined in Section 83 of the International Monetary Fund (IMF) Balance of Payments Textbook, 1996.