Congress urged to revise BSP charter

The country’s top central banker is hopeful that legislators will approve proposed changes to the Bangko Sentral ng Pilipinas (BSP) charter before the end of the year.

With the House of Representatives’ version having been passed on second reading last week, central bank Governor Nestor Espenilla Jr said in a statement: “We hope Congress will pass before the end of 2018 the proposed legislation amending the BSP charter as this will pave the way for an even stronger banking industry.”

The corresponding Senate bill remains pending.

Espenilla said amendments to its charter “will help BSP fulfill its mandates more effectively and will ensure the banking system remains a pillar of strength for the Philippine economy amid evolving trends and external challenges.”

House Bill 7742 aims to reinforce the central bank’s corporate and financial viability and strengthen its monetary stability functions. It also seeks to increase the BSP’s capitalization from P50 billion to P200 billion.

Proposed provisions will also restore its tax-exempt status and grant the BSP authority to establish adequate loss allowances and reserve buffers for better management of its operational risks.

Senate Bill 1297, meanwhile, seeks to increase the BSP’s capitalization to P150 billion, payable immediately upon effectivity of the proposed measure in order to strengthen the corporate and financial viability of the country’s monetary authority.

It also seeks to grant the BSP the flexibility to establish adequate loss allowances and create reserve buffers against future risks and contingencies, and the restoration of tax exemptions similar to other central banks.

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