Senators are eyeing the early passage of a law boosting the capital of Bangko Sentral ng Pilipinas (BSP) by P150 billion, even as Congress mull over proposals to update the two-decade-old BSP charter in a bid to strengthen the local banking system.
Sen. Francis G. Escudero, presiding over a hearing of the Senate Committee on Banks and Financial Institutions, acknowledged the BSP needs to “keep abreast with the changing times.”
“As an example, the capital boost will enable them to monitor, supervise and examine the web of transactions in the banking system,” Escudero said, noting that the proliferation of computerized banking transactions “necessitates technical development for the BSP to fully discharge its mandate in the banking and financial systems.”
Escudero explained that if the fund was automatically appropriated, “it will be considered as an off-budget item and will not have to pass through the scrutiny of Congress anymore.”
The senator pointed out that the scope of the operations of financial institutions has evolved since the BSP’s inception 23 years ago, adding that Congress must now provide additional funds to ensure its “monetary and financial stability, as well as corporate and financial viability to respond to contemporary challenges.”
Indicating a consensus in the Senate Committee on Banks to enable the BSP to keep pace with the innovations of a modern globalized economy, Escudero sees no major hitch in passing the enabling law that would strengthen the Bangko Sentral by amending its charter, as proposed in separate bills filed by Senate President Pro Tempore Franklin M. Drilon and Senate Minority Leader Ralph G. Recto to update the BSP’s mandate and give it “greater operational flexibility and more financial resources.”
For his part, BSP Governor Amando M. Tetangco Jr. affirmed support for the Senate initiatives, recalling that after the BSP was restructured in 1993, the country went through two financial crises: the Asian financial crisis in 1997 and the global financial crisis in 2007. The BSP’s capital base remained unchanged through all that, it was noted.