TWENTY-FIVE years after the Bangko Sentral ng Pilipinas was established as “an independent central monetary authority”, the BSP is finally getting a much needed boost in discharging its mandated responsibilities concerning money, banking and credit.
And it is about time.
Last week, the Senate approved the increase in BSP’s capitalization to P200 billion from the current P50 billion.
Last June, the House of Representatives approved a similar increase. In addition, the House version authorized the restoration of the tax exempt status of BSP. It also authorized BSP to issue its own own debt notes without undue restrictions.
For the above, credit must be given Senator Francis Escudero (Senate Chair of the Committee on Banks, Financial Institutions and Currencies) and Representative Ben Evardone (House Chair of the Committee on Banks and Financial Intermediaries) who both delivered where a long line of their predecessors came up short.
Ever since I can remember, bills were filed in both houses of Congress, year after year, seeking to strengthen the Bangko Sentral.
The legislative intent, at least on paper, was there. All previous authors cited the sweeping change in the country’s economic milieu, the increased integration of financial markets due to globalization and the evolution of financial institutions.
Hence the need for a retrofitted Bangko Sentral which would be better prepared to meet these challenges.
Unfortunately, the legislative will did not match the intent.
Year after year, these proposals joined the “Mona Lisa bills”. As the popular refrain of yesteryears went: “They just lie there and they die there.”
2018 proved different.
Escudero’s approved version even provided the source of funding – via automatic retention of dividends and taxes payable by the BSP to the national government.
Further, the sufficiency of the P200 billion capitalization will be reviewed every five years and will be adjusted “upon joint recommendation” of the Finance, and Budget and Management secretaries together with the Monetary Board.
The senate bill also increased the number of BSP Deputy Governors from three to five.
The new measure – which is expected to be signed by President Duterte before year end – is a fitting delayed silver anniversary gift to the Bangko Sentral which turned 25 last July 3.
The need for a whistleblower policy
The recent case of the Nissan Chairman Carlos Ghosn whose financial wrongdoings were only recently exposed emphasizes the need for and strict observance of a whistleblower policy in organizations.
Apparently, Nissan had none. Or if it had, the policy was totally ignored.
Over the years, Ghosn had been underreporting his income and misallocating company funds for personal use. The recent discovery of Ghosn’s wrongdoings not only resulted in Ghosn’s removal but worse, it also caused a precipitate fall in the value of Nissan stocks.
Most progressive companies, especially publicly listed ones, have whistleblower policies to prevent or detect fraud or misconduct and to enable an effective response.
The policy enumerates who are responsible for reporting (which normally includes everybody from top to bottom), the procedure for reporting, the observance of strict confidentiality, the observance of due process for the party complained of and a policy of non-retaliation against the whistleblower.
Most important is the establishment of an open and supportive culture that will encourage immediate reporting of anomalies within organizations.
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