Accounting Alert

This Accounting Alert is issued to circulate Bangko Sentral ng Pilipinas (BSP) Circular No. 1192 dated April 11, 2024, which discusses the amended provision of the Manual of Regulations on Foreign Exchange Transactions (FX Manual).

The Amendments

Some of the major amendments are as follows:

• Applications for approval/registration of foreign/foreign currency loans/borrowings, inward investments and other foreign currency transactions filed with the BSP-IOD shall be free of charge.
• Post-verification of FX transactions and reports may be undertaken by the BSP to verify compliance with the provisions of the FX manual and/or the condition/s imposed on the approval/registration/authority granted/issued by the BSP and for monitoring purposes. A violation of any of the provisions of the FX manual and/or the conditions imposed on approval/registration/authority granted/issues by the BSP may be a ground for cancellation/revocation thereof.
• Authorized Agent Banks (AABs)/AAB forex corps may sell foreign exchange (FX) without need for prior BSP approval to cover payments for non-trade current account transactions (other than those related to foreign/foreign currency loans and investments) listed under Appendix 1 of this Circular subject to the submission of some requirements to the FX selling institution.
• AABs/AAB forex corps may sell FX to non-resident tourists and balikbayan to the extent of the amount of FX shown to have been sold for pesos by the non-residents to AABs/AAB forex corps. Departing non-resident tourists and balikbayan may reconvert at airports or other ports of exit unspent pesos up to a maximum of USD10,000 or its equivalent in other foreign currency, calculated at prevailing exchange rates, without showing proof of previous sale of FX for pesos.
• Proceeds of foreign/foreign currency loans/borrowings (including those from issuances of bonds/notes/other debt instruments) of the National Government, its political subdivisions and instrumentalities, and GOCCs shall be deposited with the BSP pending utilization, pursuant to Section 113 of Republic Act (R.A.) No. 7653 (The New Central Bank Act) dated 14 June 1993, as amended.
• The following investments are now included in the list of inward investments that shall be registered with the BSP.
  • Debt securities issued onshore by private sector residents that are not listed at an onshore exchange and not covered by the provisions of Part Three, Chapter I of the FX Manual (Loans/Borrowings and Guarantees)
  • Instruments issued by residents and non-residents which are not covered by Sections 33, 34 and the provisions of Part Three, Chapter I of the FX Manual (Loans/Borrowings and Guarantees), and not contrary to applicable laws, rules and regulations
• Investments in the following instruments shall be registered upon reporting thereof by registering AAB to the BSP; provided the applicable guidelines on registration/reporting of investments and supporting documents in the Appendix 10.B and 10.C of this Circular is duly complied with.
  • Debt securities issued onshore by the National Government and other public sector entities
  • Equity securities issued onshore by residents that are listed at an onshore exchange (e.g., PSE)
  • Debt securities issued onshore by private sector residents that are listed at an onshore exchange and not covered by the provisions of Part Three, Chapter I of the FX Manual (Loans/Borrowings and Guarantees)
  • ETFs issued/created onshore by residents
  • PDRs that are listed at an onshore exchange
  • Peso time deposits with an AAB with a maturity of at least 90 days
  • Equity securities issued onshore or offshore by non-residents that are listed at an onshore exchange
  • Debt securities issued onshore by non-residents that are listed at an onshore exchange
  • Instruments under Section 37.(a-h) used as collateral involving transfer of legal/beneficial ownership of the collateral to the non-resident investor
• The Circular also provides for the updated reportorial requirements required to be submitted to the BSP by the AABs, offshore banking units, and AAB forex corps where applicable.

Effectivity and Transitional Provisions

This Circular shall take effect 15 banking days after its publication in the Official Gazette or in a newspaper of general circulation in the Philippines. 

Upon the effectivity of this Circular until 30 September 2024, registering AABs shall continue to: (a) report the transactions of registered investments under Section 37 of the FX Manual using the old report forms (as of May 2023 version of the FX Manual); and (b) make the necessary preparations and adjustments to their systems and processes to ensure compliance with the new reporting guidelines. 

The submission of the revised report forms shall commence on 01 October 2024.

Please see attached circular for further information.