A bill seeking to grant Bangko Sentral ng Pilipinas a P150-billion additional capital to strengthen its monetary and financial stability functions has been passed by the House committee on banks and financial intermediaries.
The bill, which seeks to amend Republic Act No. 7653 or the New Central Bank Act that created BSP, also calls for the restoration of the central bank’s tax exemption and seeks to enhance its credit operations.
“More than 20 years after the enactment of R.A. No. 7653, the economic and financial milieu in the Philippines has changed significantly in scale, scope, reach and complexity,” said Eastern Samar Rep. Ben Evardone, chairman of the panel and one of the bill’s principal authors.
“There is a need therefore to improve the ability of the BSP to respond to the challenges being faced by the financial system” by amending the central bank’s founding law.
He said the panel also passed the removal of the thresholds in the growths of monetary aggregates and credit as guiding principles in monetary administration while restoring the central bank’s authority to issue negotiable certificates of indebtedness even during normal times.
This will grant BSP the flexibility to establish adequate loss allowances and create reserve buffers against future risks and contingencies.
Among amendments approved are expanding BSP’s supervisory authority to include additional categories of financial institutions, and granting the BSP oversight powers of payment and settlement systems or operators and the power to impose sanctions on transfers and acquisitions of substantial shares of banks and quasi-banks engaged in allied services.
Evardone said the proposed amendments will strengthen BSP’s monetary and financial stability functions and will reinforce its corporate and financial viability and “ensure its independence in compliance with the express requirements of the Constitution.”
The post Bill Seeks P150-B Capital Infusion to BSP appeared first on Manila Bulletin.
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