BANKS can no longer sell foreign currencies to the Bangko Sentral ng Pilipinas (BSP), as the regulator winds down such transactions going into 2019.
BSP Governor Nestor A. Espenilla, Jr. ordered the central bank’s regional offices and branches to stop accepting foreign currency notes from branches of lenders “effective immediately” through Memorandum 2018-034 issued last week.
Meanwhile, head offices of authorized agent banks are given until July 26, 2019 to accept foreign bills.
Asked to explain, BSP Deputy Governor Diwa C. Guinigundo said last week that the order is meant to “streamline” operations concerning foreign banknotes, but is purely a procedural matter that shouldn’t affect transactions with the public.
According to the new rules, the BSP’s regional offices cannot accept foreign currencies from bank branches. However, they can still have these converted to the peso by sending the bills to their head offices, which will then sell them to the BSP.
The banks’ main offices located within Metro Manila still have until mid-2019 to sell these foreign currency notes to the BSP’s Cash Department, with the proceeds to be credited to the peso demand deposit accounts maintained by the lenders with the central bank.
These transactions will be charged a P2 service fee per piece of foreign banknote which they will sell or deposit with the BSP. This will be charged to the proceeds of the peso conversion.
“[A]fter 26 July 2019, banks will no longer be allowed to sell foreign currency notes to the Bangko Sentral,” the central bank said in the issuance.
The central bank has been constantly reviewing and relaxing rules covering conversions from the peso to foreign currencies, particularly the dollar. This comes as dollar liquidity has improved over the past decades, with local players able to service bigger foreign currency demand.
Among the major changes to currency trading rules include a higher limit for over-the-counter dollar purchases to $500,000 for individuals and $1 million for corporates, while dollars acquired through Philippine lenders may now be kept as dollar deposits with the banks concerned.
Rules covering over-the-counter purchases of foreign bills are also being simplified, which the regulator’s way of prodding the public to use banks rather than the black market to exchange their money. — Melissa Luz T. Lopez