The Bangko Sentral ng Pilipinas (BSP) on Tuesday urged the House of Representatives to recast not only its charter but the Anti-Money Laundering Act (Amla), as well as the secrecy provisions covering bank deposits to help promote financial and monetary stability in the country.
In a organizational meeting, BSP Deputy Governor Diwa C. Guinigundo bared optimism the houses of Congress will amend the BSP Charter, or Republic Act (RA) 7653, which seeks to increase the central bank’s capital by P150 billion.
He observed it took the national government almost 20 years to pay in full the original P50-billion BSP capital mandate. That amount has since been rendered inadequate by vast changes in the monetary and financial landscape and, thus, the need to boost the capital base anew to P150 billion, Guinigundo said.
“The proposed amendments [to the BSP Charter are needed] considering the current realities. One, the need for higher capital and tax exemption of the BSP. In other words, there’s a need for the central bank to be assured of corporate viability. So that goes into the heart of the issue of providing more capital from P50 billion to P150 billion,” Guinigundo.
“Second, in terms of its tax exemption, the old central bank used to enjoy the tax-exemption privilege. Initially, during the first five years of the new BSP, it also enjoyed tax exemption. We believe the BSP again should be accorded this tax-exempt privilege as the nation’s central monetary authority,” Guinigundo added.
During the 16th Congress, the bill amending the New Central Bank Act was approved by the lower chamber but failed to muster the Senate.
In the 17th Congress, a measure has yet to be filed amending the 24-year-old BSP Charter.
But Liberal Party Rep. Ben Evardone of Eastern Samar said: “My committee will make the measure amending the BSP Charter a priority measure.”
Former Speaker and now Rep. Feliciano Belmonte Jr. of Quezon City author of the measure during the previous Congress, said more than two decades since the Central Bank Act was enacted, the economic milieu in the country has changed; globalization has increased the integration of financial markets; and the scope of operations of financial institutions has evolved.
“In light of this realities and developments, there is undoubtedly a need to respond to contemporary challenges by amending RA 7653 so the BSP remains effective in its conduct of monetary policy and supervision of entities within the financial system,” Belmonte said.
According to Belmonte, the proposed legislation is a big step toward fulfilling the desired amendments for RA 7653 to strengthen the BSP’s Monetary Stability Fund, its financial stability function and its corporate and financial viability as lender of last resort.
In the same organizational meeting, BSP Deputy Governor Vicente Aquino also called for the passage of measures amending the Amla and the secrecy provisions covering bank deposits.
“The interest of the BSP here is only in relation to the grant of authority to look into deposits when checking compliance by covered persons with the provisions of the Amla and this is in accordance with the BSP’s supervisory authority under Section 4 of the RA 8791, or the General Banking Act,” he said.