Loren warns vs misuse of BSP easing of forex rules

MANILA, Philippines - Sen. Loren Legarda warned yesterday that the relaxation by the Bangko Sentral ng Pilipinas (BSP) of its rules on foreign exchange transactions may be used by some corrupt people in government to park their ill-gotten wealth outside of the Philippines to escape garnishment.

“There may be good and valid reasons for this move by the BSP to allow just anyone to buy $30 million from local banks and to ‘invest’ the same abroad without needing approval anymore from the BSP,” Legarda said.

“But anyone can see how this relaxation of rules may be used by unscrupulous individuals, whether belonging to the private or public sector, to hide ill-gotten wealth abroad under the guise of investing,” she said.

Under the new rule, banks and non-banks, as well as their clients, need only to seek BSP approval for investments over $30 million.

With a new administration coming in, Legarda expressed concern that some people who may have made a killing in government contracts under the outgoing administration may take advantage of the new BSP rule.

“Money laundering, despite our having already passed an anti-money laundering law, remains a serious concern here,” she added.

Legarda, who had chaired the Senate economic affairs committee, also pointed out that the relaxation of the rules may induce “capital flight” at a time when the Philippines should be enticing foreign investors to invest in the country.

“Diversifying investment opportunities for local businessmen should be balanced with our country’s own need for investments,” she said.