MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) will receive P20 billion capital infusion from the Aquino government, the highest amount the institution has received since the Central Bank Act of 1993 was passed.
In a statement on Wednesday, December 26, Budget and Management Secretary Florencio Abad announced that President Aquino has approved the release of some P32.29 billion funds -- of which the bulk is allocated for the BSP -- in the remaining days of 2012 and in early 2013.
Abad stressed that the P20 billion infusion into the authorized capital stock of the BSP is is part of the P50 billion that the national government needs to provide the BSP as part of the recapitalization mandated by the new law covering central banking in the country.
With the P20 billion, the infusion of the national government now amounts to P40 billion. The Aquino administration still needs to cover the remaining amount of P10 billion.
“It is only under the Aquino Administration that BSP received bulk of its legally-mandated equity infusion from the national government. With this fresh capital, BSP will be able to recuperate its losses from stabilizing our currency,” Abad said.
He said a stronger and more adequately capitalized BSP is needed in order to sustain the stable macroeconomic and investment climate, especially as we look forward to having an investment-grade credit rating by next year.
In a media briefing, BSP Governor Amando M. Tetangco Jr. welcomed the news, stressing that the additional capital inflow would help the BSP pursue its monetary role.
"As you are aware, the current domestic environment has been greatly impacted by capital flows from overseas. The costs associated with managing consequent domestic liquidity condition to ensure this is consistent with our inflation objective," Tetangco said in a briefing on Wednesday.
"This has not been trivial. The BSP has also continued to incur losses from our dollar holdings as the peso has continued to be strong," he added. - Rappler.com
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