In its commitment to maintain a foreign exchange regulatory framework that is responsive to the needs of a dynamic and expanding Philippine economy, the Bangko Sentral ng Pilipinas (BSP) issued a number of circulars in 2022 and 2023 which streamlined the requirements for forex transactions. The salient provisions of these circulars are as follows.
CURRENCIES DECLARATION FORM
The BSP allows persons to bring into or take out of the country a maximum of P50,000 in Philippine currency, up from P10,000 without prior written authorization.
Under BSP Circular No. 1146 (dated May 26, 2022), submission of a CDF for the physical cross-border transfer of Philippine currency exceeding P50,000 is now required.
The CDF requires the person transferring currency to declare the following information:
(1) Identification of the transferor (name, birth details and citizenship, travel document details);
(2) Occupation or principal business activity;
(3) Addresses (local and overseas, as applicable);
(4) Travel details (ports of origin and destination, dates of departure and arrival);
(5) Types of currency being transferred;
(6) Date of written BSP authorization; and
(7) Source of funds (e.g., salary, business) and purpose of the currency transport (e.g., travel, medical).
The above information consolidates the requirements of the BSP, Bureau of Customs (BoC), and the Anti-Money Laundering Council for the more efficient and timely capture of data. Incidentally, an official from the BoC would be required to administer an oath and sign the CDF to verify the currency count.
Finally, the CDF indicates that the limit for cross-border transfer of Philippine currency is on a per-person basis, regardless of age. As an example, for a family of four, a total of P200,000 may be brought in or out of the Philippines without prior authorization.
SIMPLER ELECTRONIC DOCUMENT SUBMISSION
In response to the pandemic, the BSP temporarily allowed the submission of soft-copy documents; in turn, all documents issued by the BSP (e.g., letters of approval and the Bangko Sentral Registration Document or BSRD) during the quarantine period were made electronic. A year after, the BSP formally adopted, on a permanent basis, the issuance and submission of documents via electronic means through BSP Circular No. 1124.
BSP Circular No. 1171 (dated March 29, 2023) was also issued to further formalize the simplified documentary requirements, as follows:
(1) Application forms from the BSP-International Operations Department (IOD) can be electronically filed to the BSP without e-signatures, provided that these are accompanied with the attestation required under prevailing circulars; and
(2) Relevant supporting documents are not required to be notarized (unless provided for by applicable laws), subject to the submission of the above attestation.
Following these, the effective date of filing/submission to the BSP will be the date when the reports are sent electronically to the designated BSP e-mail addresses. Prior to Circular No. 1171, it was mandatory for forex reports to be filed physically at the BSP’s Main Office or its Regional Offices.
In view of the above, prior to processing a forex transaction, authorized agent banks are required to verify first with the BSP the authenticity of electronically issued BSP documents submitted by their clients.
NO PROCESSING FEES
In the same circular, applications for approval and/or registration of forex transactions submitted to the BSP-IOD (e.g., forex loans, inward investments) are now free of charge, unless otherwise required. As such, the BSP deleted the corresponding appendix listing of its processing fees on forex transactions.
The BSP likewise repealed the assessment of processing fees when a private sector foreign loan (that is not publicly guaranteed) is registered with the BSP.
REISSUANCE OF LOST E-BSRDs
From March 27, 2020, lost BSRDs issued in electronic form may now be reissued by the BSP pursuant to Circular No. 1171, provided that there has been no change in the financial terms of the registered forex loan. Previously, the BSP only allowed the replacement of lost BSRDs subject to the foreign investor’s submission of an affidavit of loss.
A request to reissue shall be filed with the BSP-IOD by the resident borrower, supported simply by a cover letter or e-mail containing the signed attestations required by the BSP.
APPRAISAL OF NON-CASH INWARD INVESTMENT
Finally, Circular No. 1171 removes the requirement that the BSP appraise the value of in-kind inward foreign investment (i.e., assets actually transferred to the Philippines, such as machinery/equipment) for registration purposes.
Given the pressing need to make cross-border transactions more convenient, it is encouraging to see the BSP revisiting its regulations and ensuring that these keep up with the faster pace of doing business after the pandemic.
The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.
Bon Yannicka M. Chua is an assistant manager at the Tax Services department of Isla Lipana & Co., the Philippine member firm of the PwC network.