Businesses will benefit from the foreign exchange liberalization policy recently implemented by the Bangko Sentral ng Pilipinas (BSP), the Bankers Association of the Philippines (BAP) yesterday said.
According to the BAP, the new policy will help small and medium enterprises that are heavy on dollar or foreign currency transactions in managing their cash flow.
“The liberalization allows more elbowroom for businesses in their payments or receivables,” the BAP said.
Last Sept 15, the Central Bank implemented the rules and regulation of circular 925 that increases the foreign currency exchange cap from $120,000 to $500,000 for individuals and $1,000,000 for corporates subject to a more streamlined documentary requirements.
BAP pointed out that the liberalization does not only bring convenience but also security to the note holders.
The circular allows individuals or corporates to directly credit the foreign currency notes bought to their respective foreign currency deposit unit or account.
“The circular created a safer environment for the public since bank customers are now able to buy foreign exchange without having to bring out cash from the bank. It also means less chance of getting counterfeit notes,” the organization said.
BAP said the liberalization is a reflection that the Philippine banking sector is catching up to be at par with global banking trends and practices.
“This shows that the Philippines is stepping up to align itself with the global trend where electronic invoicing and banking are the general directions for corporates,” the bank group said.
The BAP also noted that this policy may attract more individuals and corporates to course their foreign currency transactions with banks instead which will help the government in monitoring the inflow and outflow of foreign notes.
“As money pass through the banks and the BSP collects reports on how the money was used, economic managers will be able to better see and understand the flow of money in the economy. The better we understand the flows, the better our leaders will be able to steer our economy,” the organization said.