MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) now has more powers over financial institutions and more power to sanction dubious financial transactions, thanks to a newly signed law.
President Rodrigo Duterte signed Republic Act No. 11211, an amendment to the New Central Bank Act, last Thursday, February 14. Malacañang released a copy of the new law on Monday, February 18.
One major feature of the law is it raises the BSP's capitalization to P200 billion, from P50 billion. This means the BSP will have more funds for absorbing losses or for investment.
The law also expanded the BSP's supervisory powers to cover more types of financial institutions, like money service businesses, credit granting businesses, and payment system operators.
It now also has the power to demand the forfeiture of profits from unauthorized financial transactions, among other administrative and criminal sanctions. It can now impose sanctions on unapproved transfers and acquisitions of shares by banks and quasi-banks.
BSP Governor Nestor Espenilla Jr said these changes "bolster the BSP's capability to promote the stability of prices and the financial system." (READ: EXPLAINER: Why is the role of BSP governor important?)
Another feature of the law is to restore the BSP's authority to issue debt papers, giving the agency "greater flexibility in determining the timing and size of its monetary operations." (READ: Bangko Sentral hits pause on interest rates)
In all, the new measure improves the BSP's corporate viability and makes it more responsive to new international trends and best practices. (READ: Bangko Sentral sees 'more manageable' inflation in 2019) – Rappler.com
Pia Ranada covers the Office of the President and Bangsamoro regional issues for Rappler. While helping out with desk duties, she also watches the environment sector and the local government of Quezon City. For tips or story suggestions, you can reach her at email@example.com.