Philippine central bank raises amount of U.S. dollars local banks can hold

The Philipppine Central Bank, or Bangko Sentral ng Pilipinas (BSP), Thursday decided to raise the amount of U.S. dollars local banks can hold and those local companies can invest abroad and individuals can buy from banks, said BSP Governor Amando Tetangco Jr.

The BSP imposed a adjustment in both the banks' overbought and oversold position to 20 percent of their unimpaired capital or an absolute amount of 50 million U.S. dollars.

The amount of dollars companies can invest abroad without prior BSP approval was doubled to 12 million U.S. dollars from 6 million U.S. dollars.

Meanwhile, individuals can now buy up to 10,000 U.S. dollars of foreign exchange, twice the earlier limit of 5,000 U.S. dollars without presenting documentary requirements.

The new regulations will take effect on April 2.

The new overbought limit is 10 times the original allowable 5 million U.S. dollars. The new ratio to unimpaired capital, or capital without encumbrances, is eight times the earlier 2.5 percent.

The move by BSP is envisaged to make the regulatory environment more responsive to the needs of an expanding, more dynamic economy, which has increasingly become integrated with global markets, Tetangco said.

"Improving macroeconomic fundamentals, as well as ongoing banking, capital market and institutional reforms provide a favorable setting for the comprehensive review and gradual reform of the existing foreign exchange regulatory framework," he said.

Source: Xinhua