BSP Governor Amando M. Tetangco, Jr. announced today that the Monetary Board has approved a one-year grace period within which applications for registration of foreign direct investments (or FDIs) may be filed with the BSP. This will cover all FDIs that are existing and already recorded in the books of the investee firm, regardless of the date when funding for the investment was made via inward remittance of foreign exchange (FX) or transfer of assets to the Philippines.
The new measure is part of the BSP’s continuing efforts to facilitate the use of FX resources of the banking system for legitimate purposes, including outward remittance in the FX equivalent of peso divestment proceeds from, and income on, registered FDIs.
It will be recalled that in 2013, the Monetary Board approved the adoption of a one-year prescriptive period within which applications for FDI registration must be filed with the BSP. This prescriptive period intends to allow the timely capture by the BSP of more current information on foreign investments flowing into the economy, for better analysis of developments and trends in capital flows and formulation of policies and strategies on the matter. The one-year period is reckoned from date of inward remittance of FX or transfer of assets to the Philippines. A two-year transition period was also provided to allow registration of old but unregistered FDIs already recognized in the books of the investee firm, regardless of when the funding for the investments came in.
The two-year period ended on 18 April 2015. However, in response to numerous applications for registration that were received after said date and to further widen the coverage of BSP’s database on FDIs, an additional one-year grace period for filing such requests was approved by the Monetary Board subject to compliance with registration requirements under the Manual of Regulations on Foreign Exchange Transactions, as amended, and payment of a processing fee of PHP10,000.00 per Bangko Sentral Registration Document to be issued.
The Governor pointed out, however, that the additional one-year period is the final chance given for existing FDIs to be registered with the BSP and, thus, enjoy flexibility in sourcing FX for outward remittance of capital withdrawn from investments in the country and related income from same.
It was also clarified that notwithstanding the prescriptive period, the registration of foreign investments remains optional on the part of the investor, and that divestment proceeds from unregistered investments and income thereon can still be remitted out, provided the FX is not obtained from the banking system.