Proposed changes to the central bank’s charter hurdle House committee level

A MEASURE which seeks to infuse an additional P150 billion in capital into the Bangko Sentral ng Pilipinas (BSP), among other changes to its more than two decades old charter, has been approved at the committee level at the House of Representatives.

The House committee on banks and financial intermediaries, chaired Eastern Leyte Rep. Ben P. Evardone, approved the measure on Monday afternoon.

“The amendments seek to reinforce corporate and financial viability while strengthening BSP’s monetary and financial stability functions,” said Mr. Evardone.

The proposal aims to amend Republic Act No. 7653 or the New Central Bank Act of 1993, also known as the BSP charter.

Mr. Evardone added that “[t] he body decided to grant BSP additional capitalization of P150 billion, restore tax exemption, among others.”

This, in turn, will bring the capitalization of the country’s central monetary authority to P200 billion from the P50 billion mandated under the current charter.

Under the bill, additional powers were granted to the central bank to provide flexibility to establish adequate loss allowances and create reserve buffers against future risks and contingencies.

Mr. Evardone added that the committee approved the removal of the thresholds in the growth of monetary aggregates and credit as guiding principles in monetary administration while restoring the BSP’s authority to issue negotiable certificates of indebtedness.

“The committee also approved broadening of BSP’s examination authority to include banks’ and quasi-bank’s subsidiaries, and allowed full flexibility to conduct risk-based supervision,” he said.

The BSP is likewise provided oversight of payment and settlement systems or operators and the power to impose sanctions on transfers and acquisitions of substantial shares of banks and quasi-banks engaged in allied services. •