QuestionsQuestions (BSP CIRCULAR NO. 388)
It consolidates and clarifies existing BSP regulations on: (1) the sale of foreign exchange (FX) for non-trade transactions by Authorized Agent Banks (AABs), Non-Bank BSP-Supervised Entities (NBBSEs), and their subsidiary/affiliate forex corporations; and (2) the authority of NBBSEs and their subsidiary/affiliate forex corporations of AABs/NBBSEs to sell FX.
Trade transactions refer to export and/or import transactions. Non-trade transactions are all other FX transactions not included in the definition of trade transactions, including foreign currency loans and foreign investments.
AABs include categories of banks except Offshore Banking Units (OBUs) duly licensed by the BSP. Each bank category must operate within its legal/regulatory operational parameters.
Non-bank entities supervised by the BSP under R.A. No. 7653, R.A. No. 8791, and other special laws, including Non-Bank Financial Institutions Performing Quasi-Banking Function (NBQBs), their subsidiary/affiliate engaged in allied activities, and trust entities.
If the sale does not exceed US$5,000: an application to purchase FX using the attached format. If it exceeds US$5,000: a notarized application using the specified format, supported by documents listed in Item A of Annex B.
It is deemed splitting if total FX sales to any one purchaser within a 20 calendar-day period exceed US$5,000. The limit applies on a consolidated basis for the AAB/NBBSE/forex corporation.
The documents listed in Items B and C of Annex B, together with an application to purchase FX using the attached format, are required.
NBBSEs shall not sell FX to (a) non-residents, and (b) residents for: (1) investment purposes (domestic or abroad), including capital repatriation and remittance of profits/dividends; (2) payment of FX obligations to residents other than AABs; (3) payment of unregistered foreign currency loans/obligations to non-resident financial institutions (with a specific exception for those outstanding as of Oct. 27, 2000); and (4) payment of FCDU loans not eligible to be serviced with FX purchased from the banking system (with a specific exception for FCDU loans outstanding as of Oct. 27, 2000).
AABs shall not sell FX to residents for payment of FX obligations to residents other than AABs.
Regardless of amount, FX sales by NBBSEs (including forex corporations) for payment of importations must follow the documentation requirements under specified items of a January 24, 2002 BSP Circular-Letter. It also allows servicing of payments for unregistered importations of residents shipped under DA/OA arrangements before the Circular’s effectivity.
Original documents must be presented on or before the maturity/delivery date of spot/forward contracts. They must be stamped “FX SOLD,” showing date and amount, and signed by the seller’s authorized signatory. Copies of marked supporting documents, including proofs of payment, must be retained, marked “Original Documents Presented as Required,” and made available to BSP for verification.
The seller/remitter ensures applicable Philippine taxes related to (a) sale of FX, (b) remittance of FX, and (c) the underlying FX transaction are paid, and that the remittance is net of such taxes. The remitter/seller must require submission of receipts evidencing payment of applicable taxes.
Violations are subject to the penalty provisions under R.A. No. 7653 (The New Central Bank Act) and other existing banking laws and regulations.
It repeals Circular No. 287 (July 26, 2001) and certain Circular-Letters dated September 17, 1997; October 2, 1997; October 31, 2000; July 26, 2001; August 9, 2001 (non-trade transactions); and May 17, 2002. It also amends specific items of Circular No. 264 (Oct. 27, 2000), Circular-Letter Aug. 24, 2000, and Circular No. 1389 (Apr. 13, 1993), among others inconsistent with the new guidelines.
It takes effect immediately.
Presentation of the applicant’s passport and passenger ticket (copies retained by the bank). For travel funds over US$10,000, additional requirements include a BIR-stamped copy of the applicant/sponsor ITR, travel authority from the sponsor’s office (if sponsored), and an invitation from the foreign sponsoring institution (if applicable).
Either: (1a) BSP registration letter and accompanying schedules (Schedule RA-2 and, if applicable, RA-2.1) plus creditor billing statement, limited to maturing amounts on scheduled due dates; or (2a) BSP letter-authority for the borrower to purchase FX to service specific loan accounts with an accompanying schedule if available plus creditor billing statement, limited to unutilized balance, with remittance coinciding with due dates unless BSP-approved otherwise.
Annex B provides separate sets: (1) for capital repatriation (e.g., via PSE-listed securities, direct foreign equity investments, or investments in peso government securities/money market instruments/90-day time deposits) through BSRD/BSRD letters/advice and proof of underlying transactions; (2) for remittance of dividends/profits/earnings requiring BSRD or BSRD letter-advice, schedules of dividends and taxes, board resolutions, and audited/interim financials and regulatory clearances where applicable; and (3) for outward investment requiring feasibility/investment documents, undertakings, BSP approval for high-value outward investments, regulatory clearances, and latest ITR.