Fernand Joseph D. Miranda l John Mark D. Cariño
The Bangko Sentral ng Pilipinas (“BSP”), through Monetary Board (“MB”) Resolution No. 764 dated 04 July 2024, has approved amendments to the Manual of Regulations on Foreign Exchange Transactions (“FX Manual”) covering reporting guidelines and penalty provisions.
BSP-Supervised Financial Institutions (“BSFIs”) and/or their Directors/Trustees, Officers and/or Employees (“DTOEs”) are expected to become more efficient in submitting their reports in accordance with BSP’s reporting standards. Significant updates to the FX Manual include the following:
Imposition of Php1,000,000.00 as maximum monetary penalty
One of the major amendments to the FX Manual is the imposition of Php1,000,000.00 as maximum monetary penalty for each transactional violation or Php100,000.00 per calendar day for continuing violations, in accordance with Section 37 of Republic Act (“R.A.”) No. 7653, as amended by Section 19 of R.A. No. 11211.
A transactional violation refers to an act or omission, constituting a violation of any applicable law or any order, instruction/directive, or regulation issued by the MB, or any order, instruction/directive, or ruling by the Governor of the BSP, which is consummated and concluded in a single instance/occasion. On the other hand, the violation will be deemed a continuing violation if it persists or lingers over time from the instant the particular act was committed or omitted until the violation is stopped.
Non-compliant reports defined
Reports that are not compliant with BSP reporting standards are defined and classified as Erroneous, Delayed, and Unsubmitted:
An Erroneous report refers to one that is submitted within the prescribed deadline but is found to be non-compliant with BSP reporting standards. The submission of an Erroneous report shall be considered as willful failure to comply with a regulation.
A Delayed report refers to one that is compliant with BSP reporting standards but submitted after it is due. The submission of a Delayed report shall be considered as a willful delay in submission of reports.
If a report was not submitted or was submitted but is not compliant with BSP reporting standards by the time the next report becomes due or upon the lapse of 30 calendar days from the report’s submission deadline, it is considered as an Unsubmitted report. The non-submission of reports shall be considered as willful refusal to comply with a regulation.
Prescribed penalties for reporting violations of each entity type
The following are the prescribed penalties for reporting violations of each entity type:
Entity Type | Primary Report | Secondary Report |
Universal/Commercial/Islamic Banks (UBs/KBs/IBs) | Php3,000.00 | Php600.00 |
AAB (Authorized Agent Banks) Forex Corps | 2,500.00 | 500.00 |
Digital Banks | 2,000.00 | 500 |
Thrift Banks (TBs) | 1,500.00 | 300 |
Offshore Banking Units (OBUs) | 1,250.00 | 250.00 |
Rural Banks (RBs)/Coop Banks | 450.00 | 150.00 |
Representative Offices (ROs) | 300.00 | 100.00 |
A Primary Report refers to one where information is (a) necessary for monitoring capital flows; and/or (b) principally part of a final report/output to be submitted to the Management of the BSP for statistical and policy development process. A report that is not included in the definition of a primary report is a Secondary Report.
Notification and appeal process for policy violations
BSFIs and/or DTOEs who will commit policy violations shall be notified by the appropriate department of the BSP, with a directive for the concerned BSFI or DTOE to show cause within 15 banking days from receipt of such notice why no monetary penalty under Section 37 of R.A. No. 7653, as amended, should be imposed against them.
All recommendations to impose monetary penalties shall be approved by the Governor or the MB, as the case may be, pursuant to Section 37 of R.A. No. 7653, as amended. However, only the MB can approve the imposition of monetary penalties against DTOEs.
The imposition of monetary penalties by the Governor shall be final and executory until reversed, modified, or lifted by the MB on appeal. The appeal shall be filed within 15 calendar days from receipt of the notice of the decision. No motion for reconsideration of the decision of the Governor or of the MB on appeal shall be allowed.
Original decisions of the MB imposing monetary penalties shall become final and executory after 15 calendar days from receipt of the decision of the MB, unless a motion for reconsideration is timely filed.
“These regulations will likewise enable the BSP to efficiently generate reports being used for policy studies and monitoring of the economy and financial system, among others. The aforesaid amendments are in line with previous BSP issuances on reporting guidelines and penalty provisions” the BSP said in a statement on 17 July 2024.