Senate President Franklin Drilon has filed Senate Bill No. 1865 which seeks to enable the Bangko Sentral ng Pilipinas to effectively respond to the challenges and innovations of a globalized economy by increasing its capitalization to P200 billion, among others, a press release from the solon's office said.
“We have to support BSP in its constitutional mandate of ensuring a competitive, robust and inclusive economy. This additional capitalization and other amendments to the current charter will enhance its capability to perform its roles in protecting the savings of depositors, ensuring the smooth flow of transactions in the financial market, and enhancing the corporate viability of the BSP,” Drilon was quoted as saying in the press release.
Drilon pointed out that an empowered BSP fosters a financial system that delivers a high quality of life for Filipinos.
“There is, undoubtedly, a need to respond to contemporary challenges by amending the BSP charter in order that it remains effective in providing policy directions in the areas of money, banking and credit as well as in supervising entities within the financial system,” Drilon said.
The capitalization being proposed, he noted, is four times higher than the P50 billion provided in the current BSP charter.
The P150 billion in additional capitalization shall be paid by the government in three consecutive annual installments, the press release said.
“The amendments will focus mainly on areas that would enhance BSP's capability in fulfilling its primary objective of maintaining price stability conducive to a balanced and sustainable growth of the economy,” Drilon said.
Aside from the additional capital build-up, the proposed new charter will expand the BSP's regulatory function to include credit card companies, money changers, e-money issuers, remittance agents, payments and settlement system operators, Drilon also said in the press release.
Under the bill, BSP shall oversee the payments and settlements system in the Philippines in accordance with sound and prudent practice, the press release said.
BSP shall also have the power to obtain information for supervisory purposes on transactions between a supervised institution and a parent or other affiliate companies, and the authority to look into the main activities of companies affiliated with the parent companies that have a material impact on the safety and soundness of the bank and the banking group, the press release added.
The bill seeks to strengthen BSP's monetary stability function by restoring its authority to issue negotiable certificates of indebtedness even during normal times, a power granted to the old Central Bank of the Philippines, but was not included in the bank's current BSP charter.
The measure also aims at strengthening BSP's financial stability function by enhancing its supervisory authority and providing legal protection for its officials when performing official duties.
The proposed law also seeks to exempt the BSP from all types of taxes, the press release added.*