BSP tightens rules on foreign exchange reporting

By Francis Allan L. Angelo

The Bangko Sentral ng Pilipinas (BSP) has introduced new amendments to foreign exchange (FX) regulations, aimed at enhancing the accuracy and relevance of FX transaction data.

The move is designed to promote price stability, ensure financial stability, and improve the supervision of banks.

The amendments, approved by the Monetary Board, will facilitate the timely submission of reports by banks, aligning them with BSP’s reporting standards. This initiative is expected to foster accountability among BSP-Supervised Financial Institutions (BSFIs) and their directors, trustees, officers, and employees (DTOEs). By streamlining report submissions, the BSP aims to efficiently generate data for policy analysis and monitoring the economy and financial system.

Key Amendments to FX Regulations

1. Non-Compliance Definition: The BSP has clarified what constitutes non-compliant reports, including erroneous, delayed, or unsubmitted reports, under the updated Manual of Regulations on Foreign Exchange Transactions.
2. Revised Penalties: Monetary penalties for reporting violations have been revised, categorized by reporting entities and report classifications (primary and secondary).
3. Penalty Limits: The maximum monetary penalty is set at PHP1,000,000 per transactional violation or PHP100,000 per calendar day for continuing violations, as per Section 37 of Republic Act (R.A.) No. 7653, amended by Section 19 of R.A. No. 11211.
4. Notification and Appeals Process: The amendments outline the procedure for notifying the concerned BSFI and/or its DTOE of FX policy violations and corresponding penalties. It also details the appeal or reconsideration process.

In ensuring fairness, consistency, and reasonableness, the BSP will consider its general principles, categories of enforcement actions, due process, and the specific circumstances of each case when imposing monetary or non-monetary penalties.

The implementing circular will take effect 15 banking days after its publication in the Official Gazette or a widely circulated newspaper in the Philippines. Reporting entities are given until December 31, 2024, to adjust their systems and processes to comply with the new guidelines.

These regulatory adjustments reflect the BSP’s commitment to maintaining robust financial oversight and enhancing the resilience of the Philippine financial system.