TO keep pace with the innovations of a modern globalized economy, Senator Francis Escudero wants to strengthen the Bangko Sentral ng Pilipinas by amending the country’s two-decades-old central bank law.
Escudero, chairman of the Senate Committee on Banks, Financial Institutions and Currencies, said his committee is studying several proposals to change the BSP charter to modernize the monetary authority’s mandate.
Senate Bill Nos. 16 (authored by Senator Franklin Drilon), 859 (authored by Senator Ralph Recto) and 1027 (authored by Escudero) all seek to amend the BSP charter by giving the central bank greater operation flexibility and more financial resources.
SBN 1027 aims to strengthen BSP’s monetary stability function and supplement the mechanisms in protecting savings of depositors and in ensuring the smooth flow of transactions in the financial system.
The bill also seeks to increase its capitalization by P150 billion.
BSP Governor Amando Tetangco, Jr. expressed his support for Senate Bill No. 1027, which Escudero put forward, during the committee hearing.
Since the restructuring of BSP in 1993, Escudero said the country has undergone two financial crises: the Asian financial crisis in 1997 and the global financial crisis in 2007.
But the BSP’s capitalization has remained constant for the past 23 years.
He said the BSP needs to keep abreast with the changing times.
He noted the proliferation of computerized banking transactions necessitates technical development for
BSP to fully discharge its mandate in the banking and financial systems.
He added if the fund will be automatically appropriated, it will be considered as an off-budget item and will not have to pass through the scrutiny of Congress anymore.
Escudero said the scope of the operations of financial institutions has evolved since the inception of BSP 23 years ago, and it must be given the monetary and financial stability, as well as corporate and financial viability to respond to contemporary challenges.