BSP bill up for committee OK

Posted on May 26, 2011

A CONSOLIDATED bill amending the 18-year-old central bank charter is up for approval next week by the House banks and financial intermediaries committee.

“We are submitting it (a consolidated bill) next week and we see it as having a good chance of [being approved],” Leyte Rep. Sergio F. Apostol, chairman of the banks and financial intermediaries, told reporters at the sidelines of a rural bankers’ convention yesterday.

The bill would be a consolidation of House Bill (HB) 61 introduced by Camarines Sur Rep. Luis R. Villafuerte and HB 458 filed by Aurora Rep. Juan Edgardo M. Angara that seek to give the Bangko Sentral ng Pilipinas (BSP), regulator of banks and quasi-banks, more powers.

Republic Act 7653 or The New Central Bank Act was passed in 1993. It created the BSP, which replaced the Central Bank of the Philippines.

The consolidated bill, Mr. Apostol said, would strengthen the central bank as the “BSP doesn’t have enough powers to check banks.”

For one, BSP examiners would be allowed to check “questionable” deposits.

“It is important to detect irregularities in the sources of bank deposits and transactions because under the existing [Anti-Money Laundering Act] the BSP has to undergo an extensive process,” Mr. Apostol explained.

A new body, independent from the Monetary Board, the BSP’s policy-making body, would also be created to hear the appeals of banks that were shut down by the central bank. It would be manned by “people experienced in courts.”

“Closed banks find it hard to file appeals, so there is a need for this department. This should be independent from the Monetary Board, which orders the closures,” Mr. Apostol said.

Sought for comment, BSP Deputy Governor Nestor A. Espenilla, Jr. said, “We haven’t seen the bill, so we can’t give a formal response yet.

But, generally, I think that the appeals process as coursed through the Court of Appeals for closed banks is already enough.”

At the Senate, a similar bill has been filed, seeking to amend RA 7653. -- Antonio Siegfrid O. Alegado