The Central Bank of Philippines is going to cancel several requirements and restrictions in relation to the transactions made in foreign exchange. This move will enable importers and others possessing foreign currency accounts to get the USD easier. Furthermore this step will be third one of the foreign exchange liberalization of the country that has begun a year ago. It seems nothing will change Central bank’s opinion even the still decreasing national currency (peso) that has reduced over 12% in relation to the USD during this year.
Here we should note, that the peso turn to the decreasing trend only in this year. The previous year was quite successful for it.
The Central Bank of the country has an intention to relax the authority of the deposit units made in foreign currency in thrift banks to deposit and borrow in USD. Another intention is to cancel registration requirement that is commonly needed for loan guarantees by local banks as well as by foreign ones.
New regulations will also enable banks to sell foreign exchange without getting the approval for advanced import payments (not more than $10,000) first of all. Furthermore the Central Bank of the country plans to increase the maturity of the importations to 360 days also without getting the approval at first.
The decision to ease foreign exchange restrictions was taken after the Central Bank increased its risk management systems as the Asian financial crisis took place on the region. As for the aims of such move they are as follows: to make the foreign exchange more available that will attract more foreign investors and this will contribute to the growth of the country’s economy.