Glossary of Terms

Bangko Sentral Registration Document (BSRD) is a document evidencing registration of foreign investments and loans. The registration allows the transacting party to access the FX resources of, or purchase FX from, AABs/AAB forex corps against Philippine Pesos for servicing/settlement of these transactions.

Foreign Currency Loans refer to loans owed to banks operating in the Philippines that are denominated in currencies other than the Philippine peso.

Foreign Exchange (FX) shall be used interchangeably with foreign currency.

Foreign Loans/Borrowings arise when a non-resident creditor lends funds (regardless of currency of denomination) directly to a resident debtor, and are evidenced by documents that are not negotiable.

Non-resident refers to an individual, a corporation or other juridical person not included in the definition of resident. (See “Resident”)

Resident shall refer to –

1. a document issued by the BSP which allows the authorized party to buy foreign currency from banks
 
2. an individual who is not a citizen of the Philippines but is permanently residing⁴² therein; or
 
3. a corporation or other juridical person organized under the laws of the Philippines; or
 
4. 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.

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⁴² Residents include any individual, citizen or otherwise, who has resided in the Philippines for a year or longer, as defined in Section 83 of IMF Balance of Payments Textbook, 1996.

PART ONE. RULES ON FOREIGN EXCHANGE TRANSACTIONS
Chapter I
GENERAL PROVISIONS

1. Regulations governing foreign exchange transactions are hereby consolidated in this Manual of Regulations on Foreign Exchange Transactions hereinafter referred to as the “Manual”.
 
2. 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.
 
 
3. 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.
 
4. 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.
 
5. 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.
 
6. 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.
 
7. 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.
 
8. 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
Chapter I
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:

1. an individual citizen of the Philippines residing therein; or
 
2. an individual who is not a citizen of the Philippines but is permanently residing⁷ therein; or
 
3. a corporation or other juridical person organized under the laws of the Philippines; or
 
4. 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.

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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 iod_investments@bsp.gov.ph (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.

PART TWO. CURRENT ACCOUNT TRANSACTIONS
Chapter I
NON-TRADE FOREIGN EXCHANGE RECEIPTS AND DISBURSEMENTS, CROSS-BORDER TRANSFER OF LOCAL AND FOREIGN CURRENCIES, AND GOLD TRANSACTIONS

Section 4. Cross-Border Transfer of Local and Foreign Currencies

1. Local Currency. A person may import or export, or bring with him into or take out of the country, or electronically transfer, legal tender Philippine notes and coins, checks, money order and other bills of exchange drawn in pesos against banks operating in the Philippines in an amount not exceeding PHP50,000 without prior authorization by the BSP. Amounts in excess of said limit shall require prior written authorization from the BSP.
    
   The term “electronic transfer” as used herein shall mean a system where the authority to debit or credit an account (bank, business or individual) is provided by wire, with or without a source document being mailed to evidence the authority.
    
   The peso amount of the International Passenger Service Charge (IPSC) refunded to outbound exempt passengers⁹ shall not be included in the aforecited limit during the implementation of said IPSC refund.
 
2. Foreign Currency. Any person, who brings into or takes out of the Philippines foreign currency, as well as other foreign currency-denominated bearer monetary instruments, in excess of USD10,000 or its equivalent is required to declare the same in writing and to furnish information on the source and purpose of the transport of such currency or monetary instrument (Annex K).
    
   As used herein, “other foreign currency-denominated bearer monetary instruments” shall refer to the following foreign exchange-denominated instruments in bearer form whereby title thereto passes to another by endorsement, assignment or delivery: travelers’ checks, other checks, drafts, notes, money orders, bonds, deposit certificates, securities, commercial papers, trust certificates, custodial receipts, deposit substitute instruments, trading orders, transaction tickets and confirmation of sale/investment.
 
3. 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.
 
4. 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.
 
5. 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.
 
6. 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.
7. 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.
 
8. The terms used herein are as defined in the “Glossary of Terms” hereof unless otherwise indicated in specific sections of this Manual.

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⁹ Those passengers exempted under Philippine laws from payment of travel tax, airport tax and other travel related taxes or fees, which include the following:

1. Philippine Sports Commission and its delegations or representatives to any international sports convention, conference and meeting, and athletes, coaches and other officials to any international competition under Republic Act (R.A.) No. 6847 (The Philippine Sports Commission Act); and
2. Overseas Filipino Workers (OFWs) under R.A. No. 10022 (Migrant Workers and Overseas Filipinos Act of 1995); Provided that, refund is made prior to departure at airports or other ports of exit.

PART ONE. RULES ON FOREIGN EXCHANGE TRANSACTIONS
Chapter II
RESIDENT TO RESIDENT TRANSACTIONS

Section 4. Cross-Border Transfer of Local and Foreign Currencies

1. AABs/AAB-forex corps may sell foreign exchange (regardless of amount) to non-bank residents for their foreign exchange transactions6 with other residents subject to the submission to the foreign exchange selling institution of a duly accomplished Application To Purchase Foreign Exchange (Annex A) and supported by documents listed under Appendix 1.
 
2. All foreign exchange purchases shall either be:
   1. remitted directly to the intended resident beneficiary’s account (including payment/treasury centers/hubs of a group of companies) on the date of purchase; or
    
   2. credited to the resident purchaser’s FCDU account (with the same or another AAB) for eventual remittance by the depository AAB to the intended beneficiary for the declared purpose: Provided, that if the depository bank is different from the foreign exchange selling institution: (i) the foreign exchange selling institution shall directly transfer the foreign exchange purchases to the depository bank of the purchaser; and (ii) the depository bank shall also be the foreign exchange remitting AAB.
 
3. Foreign currency loans obtained from banks operating in the Philippines shall also be governed by the provisions of Part Three, Chapter I of this Manual.
 

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⁶ Trade and non-trade transactions (including loans and investments) requiring settlement in foreign currency

PART TWO. CURRENT ACCOUNT TRANSACTIONS
Chapter I
NON-TRADE FOREIGN EXCHANGE RECEIPTS AND DISBURSEMENTS, CROSS-BORDER TRANSFER OF LOCAL AND FOREIGN CURRENCIES, AND GOLD TRANSACTIONS

Section 5. Buying and Selling of Gold by Residents

1. Except as provided in this Manual, gold and gold-bearing metals may be bought and sold without specific approval of the BSP.
 
2. Gold from small-scale mining, including panned-gold, shall be sold to the BSP pursuant to Republic Act No. 7076 (People’s Small-Scale Mining Act of 1991) dated 27 June 1991. All other forms or types of gold may, at the option of the owner or producer thereof and with the consent of the BSP, be sold and delivered to the BSP.
   The BSP may sell gold grains/pellets/bars and sheets to local jewelry manufacturers and other industrial users upon application, or to banks exclusively for re-sale to jewelry manufacturers/industrial users, at the BSP’s gold-selling price plus a service fee to cover costs including cost of conversion and packaging.
 

Chapter II
FOREIGN MERCHANDISE TRADE TRANSACTIONS
EXPORT TRADE TRANSACTIONS

Section 21. Gold and Constructive Exports

1. Gold. All exports of gold in any form may be allowed except for gold from small-scale mining, including panned gold, which is required to be sold to the BSP pursuant to Republic Act No. 7076.
 

PART TWO. CURRENT ACCOUNT TRANSACTIONS
Chapter II
FOREIGN MERCHANDISE TRADE TRANSACTIONS

A. IMPORT TRADE TRANSACTIONS

Section 6. General Policy. As a general rule, all kinds of merchandise imports are allowed. However, the importation of certain commodities are regulated or prohibited for reasons of public health and safety, national security, international commitments, and development/rationalization of local industry.
AABs and AAB-forex corps may sell foreign exchange to residents for payment of importations, subject to submission of the following to the foreign exchange selling institution:

1. For sale not exceeding USD500,000 (for individuals) and USD1,000,000 (for corporates/other entities) or its equivalent in other foreign currency per client per day
   ⇒ Duly accomplished Application To Purchase Foreign Exchange (Annex A)
 
2. For sale exceeding USD500,000 (for individuals) and USD1,000,000 (for corporates/other entities) or its equivalent in other foreign currency per client per day
   ⇒ Duly accomplished Application To Purchase Foreign Exchange (Annex A) and documents listed under Appendices 4 and 7
3. For sale of foreign exchange (regardless of amount) to settle net payables under intercompany netting arrangement [Open Account (O/A)] among non-bank related parties
   ⇒ Duly accomplished Application To Purchase Foreign Exchange (Annex A) and documents listed under Appendix 6.1
 

Foreign exchange purchased from AABs/AAB-forex corps for payment of importations shall either be:

1. remitted directly to the intended non-resident beneficiary’s account (including payment/treasury centers/hubs of a group of companies) on the date of purchase; or
 
2. credited to the resident importer’s FCDU (with the same or another AAB) for eventual remittance by the depository AAB to the intended non-resident beneficiary (including payment/treasury centers/hubs of a group of companies) for settlement of import obligation: Provided, that if the depository bank is different from the foreign exchange selling institution: (i) the foreign exchange selling institution shall directly transfer the foreign exchange purchases to the depository bank of the purchaser; and (ii) the depository bank shall also be the foreign exchange remitting AAB.

B. EXPORT TRADE TRANSACTIONS

Section 15. General Policy. It is the policy of the BSP to encourage commodity exports which generate foreign exchange earnings for the country. Accordingly, commodity exports are allowed without restriction except for certain commodities which are regulated or prohibited for reasons of national interest or by provision of law.

PART TWO. CURRENT ACCOUNT TRANSACTIONS
Chapter I
NON-TRADE FOREIGN EXCHANGE RECEIPTS AND DISBURSEMENTS, CROSS-BORDER TRANSFER OF LOCAL AND FOREIGN CURRENCIES, AND GOLD TRANSACTIONS

Section 2. Sale of Foreign Exchange to Residents by AABs and AAB-Forex Corps for Non-Trade Current Account Transactions with Non-Residents. AABs and AAB-forex corps may sell foreign exchange to residents to cover payments to non-resident beneficiaries for non-trade current account purposes (e.g., education, medical and travel expenses, salaries of foreign expatriates), other than those relating to foreign/foreign currency loans and investments, without need for prior BSP approval, subject to the submission of the following to the foreign exchange selling institution:

1. For sale not exceeding USD500,000 (for individuals) and USD1,000,000 (for corporates/other entities) or its equivalent in other foreign currency per client per day
   Duly accomplished Application To Purchase Foreign Exchange (Annex A);
 
2. For sale exceeding USD500,000 (for individuals) and USD1,000,000 (for corporates/other entities) or its equivalent in other foreign currency per client per day
   Duly accomplished Application To Purchase Foreign Exchange (Annex A) and documents listed under Appendix 1.
   All foreign exchange purchases for non-trade current account transactions shall either be:
    
   1. remitted directly to the intended non-resident beneficiary’s account (including payment/treasury centers/hubs of a group of companies) on the date of purchase; or
    
   2. credited to the resident purchaser’s FCDU account (with the same or another AAB) for eventual remittance by the depository AAB to the non-resident beneficiary (including payment/treasury centers/hubs of a group of companies) for the declared purpose: Provided, that if the depository bank is different from the foreign exchange selling institution: (i) the foreign exchange selling institution shall directly transfer the foreign exchange sold to the depository bank of the purchaser; and (ii) the depository bank shall also be the foreign exchange remitting AAB.
 

Foreign exchange purchased for travel and medical expenses abroad not yet incurred, and sales proceeds of emigrant’s domestic assets where the emigrant is still in the country, may be held in cash, or directly remitted to the intended non-resident beneficiary or credited to the resident purchaser’s FCDU account in accordance with items (a) and (b) above.