MANILA — The Senate passed on third and final reading a bill increasing the capitalization of the Bangko Sentral ng Pilipinas (BSP) from PHP50 billion to PHP200 billion.
“The bill proposes to strengthen the tools which the BSP exercises in performing its mandates, supplement the mechanism in protecting savings of depositors and in ensuring the smooth flow of transactions in the financial system as well as to enhance the corporate viability of the BSP,” Senator Francis Escudero said after the approval of Senate Bill No. 1297 or “An Act Amending RA 7653, otherwise known as “The New Central Bank Act.”
Twenty years after the enactment of RA 7653 which mandated the establishment of an independent central monetary authority, the economic milieu in the Philippines has changed, globalization has increased the integration of financial markets and the scope of operations of financial institutions has evolved, Escudero, chair of the Committee on Banks, Financial Institutions and Currencies, added.
In amending RA 7653, the senator said: “Undoubtedly, there is a need to respond to contemporary challenges in order that the BSP shall remain effective in its conduct of monetary policy and supervision of entities within the financial system.”
Once signed into law, the payment of the increase in the capitalization shall be funded through the retention of declared dividends and taxes due to the national government and the adequacy of the PHP200 billion capitalization shall be subject to review every five years, to be adjusted upon joint recommendation by the secretaries of finance and budget and management as well as the Monetary Board.
Aside from providing policy directions in the areas of banking and credit, the bill calls for the BSP to have supervision over the operations of banks and exercise such regulatory and examination powers over quasi-banking operations.
The Monetary Board, under the bill, shall also be allowed to authorize, regulate and have examination powers to entities or persons to engage in money service businesses.
One of the salient features of the bill is a provision increasing the number of the BSP deputy governors, from the current three to five.
This is to have a more responsive leadership in a complex institution, Escudero said.
Aside from Escudero, co-authors of the bill are Senate President Pro Tempore Ralph Recto, Minority Leader Franklin Drilon, Senators JV Ejercito and Sonny Angara.
