BSP Further Relaxes Rules on Documentation of Foreign Loans and Other Obligations

Manila—(PHStocks)—Bangko Sentral ng Pilipinas (BSP)—BSP Governor Amando M. Tetangco Jr. has announced that the Monetary Board has lifted the prohibition on notarization of documents covering foreign loans, deferred payment and other foreign or foreign currency denominated obligations of the private sector.

Previously, such documents of both the public and private sectors were prohibited from being notarized. The move is part of continuing efforts to have an appropriate regulatory framework for foreign exchange (FX) transactions.

The change in policy will cover purely private sector accounts (that is, those without guarantee or foreign exchange exposure on the part of the government financial institutions and/or government owned/controlled entities) that are submitted to the BSP for approval and/or registration. It will, thus, provide the private sector greater flexibility with respect to documentation of their financing agreements to meet specific requirements of creditors and/or foreign laws that may govern such transactions. The corresponding provision in the Manual of Regulations on Foreign Exchange Transactions will accordingly be amended.

The Governor stated that the continuing review and fine tuning of BSP regulations is consistent with its commitment to maintain a safe and sound financial system, a stable FX market, and an appropriate monetary policy supportive of sustained and inclusive economic growth.