Senate to pursue BSP charter change

MANILA, Philippines - The Senate Finance Committee yesterday vowed to pursue the amendments to the charter of the Bangko Sentral ng Pilipinas (BSP) that was proposed as early as the term of the late central bank Governor Rafael Buenaventura.

Sen. Edgardo Angara, who chairs the Senate Finance Committee, said the proposed amendments to the BSP charter would help the central bank better protect the interest of depositors and at the same time avoid losses of public funds.

“To better protect the interest of the depositors and to avoid losses of public funds, the BSP should adapt various international best practices in banking supervision and other measures that will strengthen the regulatory and supervisory powers of the BSP over banks and other financial institutions,” Angara said in a statement.

He added that the proposed changes would enable the BSP adapt various international best practices in banking supervision.

“The authority of the BSP over troubled banks, in general, is limited to the grant of emergency advances in case of illiquidity, or closure in case of insolvency. Prompt corrective actions cannot be implemented due to the absence of clear and strong legal basis. Such inability of the BSP often causes losses of hard-earned money of the depositors and also losses of public funds,” he said.

Furthermore, the legislator said the amendments would empower the BSP to use transparency mechanisms that can give more teeth in the supervision of formal and informal remittance firms in order protect overseas Filipino workers (OFWs) from usurious practices in money transfer.

The BSP has been pushing the proposed amendments to its charter for more than five years starting from the term of the late Gov. Rafael Buenaventura.

The BSP is seeking to strengthen its powers to enhance the administration of the monetary, credit and banking system under the pending bills and would help seek to track the owners of banks and determine their fitness and integrity.

Pending bills also aim to empower BSP examiners to access deposit accounts in gathering evidence against the perpetrators of bank fraud. The BSP also wants to compel a more timely rehabilitation, reorganization or restructuring of distressed banks.

The central bank is also pushing to increase administrative fines, and expedite forfeiture proceedings. The bank also seeks to obtain data from any person or entity in the formulation of monetary policy and in crafting remedial measures in case of abnormal movements in monetary aggregates, credit or price level.