BSP issues Circular No. 1212 Series of 2025 or the “Amendments to foreign exchange regulations covering FX derivatives, involving the Philippine Peso, and other transactions under the Manual of Regulations on Foreign Exchange Transactions and the Manual of Regulations for Banks”

The Monetary Board of the Bangko Sentral ng Pilipinas (“BSP”) issued Circular No. 1212 (“Circular”) on 11 April 2025, providing for amendments to the Manual of Regulations on Foreign Exchange Transactions (“FX Manual”) and its appendices/annexes.

The Circular provides that the rules on foreign exchange transactions applies to all sales of foreign exchange (“FX”) by AABs/AAB forex corps and that the duly accomplished Application to Purchase FX as well as supporting documents for sale by AABs/AAB forex corps, may be submitted in hardcopy or through electronic means in accordance with a newly created Item 4.b. Such Item states that documents to support the sale of FX and other related requests covering FX transactions shall be submitted based on the manner prescribed by AABs/AAB forex corps. Additionally, the electronic submission of these documents shall be through the official email/electronic/digital channel system designated by AABs/AAB forex corps subject to their due diligence, “Know Your Customer”, and risk management policies. 

Furthermore, the electronic submission to the BSP and AABs/AAB forex corps of documents on FX transactions shall be subject to the attestation by the submitting party: [i] on the integrity and authenticity of the submitted documents; [ii] that the transmittal of documents was via official channel; and [iii] on the availability of the original/copy of documents (as applicable) upon request by the BSP for verification. 

In relation to Inward Investments, it must be noted that applications thereof as provided under the FX manual and other related requests shall be filed through the BSP’s online system, free of charge. 

The chapter on foreign exchange derivatives transactions involving the Philippine Peso, particularly Section 88 of the FX Manual was amended such that the general policy now takes into consideration the [i] FX Derivatives Transactions of AABs with customers and [ii] FX Derivatives Transactions of AABs for their own account. The Circular also introduces several amended and new definitions of terms (such as Non-deliverable forward, Forward FX contract, Cross currency swap, etc.) as provided in Section 89. Furthermore, customers shall comply with the minimum documentary requirements for FX derivatives transactions under Appendix 18. 

Changes were also made in Section 91 (Tenor/Maturity and Settlement), which now applies to [i] Sale of FX to customers through FX derivatives (whether deliverable or non-deliverable); [ii] Settlement of non-deliverables FX derivatives; and [iii] Remittance of FX proceeds of deliverable FX derivatives contracts. Furthermore, certain changes were made to the various tests indicated in Section 93 (Cancellations, Preterminations, Roll-overs, or Non-delivery of Foreign Exchange Derivatives) except for the Mark-to-Market Test. Section 94 (Reporting Requirements) was also changed, providing for different reporting procedures depending on the situation. Finally, Non-BANK BSP-Supervised Entities that may subsequently be authorized to engage in FX derivatives as dealers are covered by this chapter.