The Bangko Sentral ng Pilipinas (BSP) ordered yesterday all custodian banks to submit a monthly report on their so-called Bangko Sentral Registration Document (BSRD) in a renewed efforts to crackdown on peso-dollar speculation and effectively monitor movements of foreign investments in the country.
The BSRD which serves as evidence of a foreign investment gives an investor the right to buy from the banking system the dollars needed to service the repatriation of capital and remittance of dividends, profits and earnings arising from such investment.
Earlier, Deputy Gov. Amando Tetangco Jr. said foreign banks operating in the country are not required to submit a report on outstanding BSRDs on a regular basis.
The report, Tetangco said, should be submitted to the BSP 15 calendar days after each report month starting March 2000.
Under the tightened rules of the BSP, if the peso time deposit or placement is preterminated before the 90-day holding period, the BSRD for that investment will be immediately canceled.
If the BSRD is canceled, the divestment or sales proceeds of the registered foreign investments cannot be brought out of the country.
In a related development, Rep. Wigberto Tañada (LP, Quezon) expressed full support on the latest announcement of the BSP to impose a 90-day holding period for all foreign investments lodged with authorized agent banks as time deposits.
"This should have been done a long time ago. It does not at all indicate that our economy is headed for a downturn. This policy merely sends a signal to foreign investors on the kind of investments that we want, that is, direct and not speculative investments," Tañada said.
The solon recalled that there was an artificial strengthening of the peso from 1992 to 1996 partly because of the huge inflow of portfolio investments at that time. From a 17-percent share to total foreign investments in 1992, it ballooned to 58 percent in 1996. "That's why when the Asian currency crisis happened in 1997, the volatile portfolio investments quickly left the country. A series of steep peso depreciation followed which made it difficult for businesses to do forward planning," he said.