New Central Bank Act, Corporation Code up for signing.
This after the lower chamber ratified late Wednesday the bicameral conference committee-approved bills. The ratified measures will be transmitted to the Palace for the President's signature.
House Committee on Banks and Financial Intermediaries Chairman Henry Ong of Leyte said the powers of the Bangko Sentral ng Pilipinas have been boosted in the bicameral committee-approved bill, which amends the BSP charter.
Besides raising capitalization to P200 billion from P50 billion, Ong said the BSP will soon have more forceful inspection and disciplinary authority over the banks and other financial institutions it regulates nationwide.
'In layman's terms, the amendments make it easier for the BSP to find out if bank officials and employees are doing things against the best interests of the depositors, clients and the economy,' Ong said.
He said the amendments boosted some penalties and empower the BSP to require the submission of specific reports, as well as information on the acts of officials and employees.
'These amendments incorporate what the BSP has learned about gaps in its supervision powers and how banks and financial intermediaries...tried to wiggle through gray areas and loopholes in the past. The amendments fill the gaps and plug loopholes,' Ong said.
Ong added, 'raising the BSP's capitalization to P200 billion is necessary because our country's banking system is growing. Being the bank of last resort, the BSP must have higher capitalization.'
Earlier, Eastern Samar Rep. Ben Evardone, former chairman of the House Committee on Banks and Financial Intermediaries, said, 'In the last 25 years, the scale and complexity of the BSP's responsibilities have been magnified by the growth of the Philippine economy and the expansion of its financial system.
'The capitalization of the Bangko Sentral, which has stayed fixed at P50 billion, is clearly inadequate to meet the requirements of a central bank in the midst of a growing economy and increasing complexity of the financial system,' he said.
MEANWHILE, the reconciled Senate-House version of an updated Corporation Code was crafted to 'strengthen and simplify corporate governance standards for a more business-friendly environment.'
Among the approved reforms, the new code includes provisions removing the minimum number of incorporators, allows electronic filing of reportorial requirements and attendance in meetings via remote communication or in absentia-practices that were not recognized in the old law. The measure also encourages the creation of new businesses, contributes to the ease of doing business, strengthens corporate governance and better protects the rights of stockholders.
It also deters corporate abuses and fraud and strengthens anti-corruption measures, fortifying the regulatory authority of the Securities and Exchange Commission.
The measure allows the perpetual existence of a corporation and the formation of a one-person corporation and removes the minimum number of incorporators.
It also removes the requirement of subscribed and paid-up capital stock for purposes of incorporation.
House Committee on Good Government and Public Accountability Chairman Xavier Jesus D. Romualdo, also principal author of the bill, said the measure will allow corporations in the Philippines to respond to and meet the needs and realities of the present times.
'Our current Corporation Code was enacted in 1980. Obviously, much has changed in how the world does business, communicates and undertakes commercial transactions over the last 38 years,' said Romualdo.
'By updating and modernizing our main body of corporate law, the Revised Corporation Code will encourage entrepreneurship and the creation of new businesses, contribute to ease of doing business, strengthen corporate governance, better protect the rights of stockholders, deter corporate abuse and fraud, and bolster anti-corruption measures and the regulatory authority of the Securities and Exchange Commission [SEC],' Romualdo said.
Earlier, Senate Minority Leader Franklin M. Drilon, principal author of SB 1280, said the amended Corporation Code was designed to 'strengthen corporate governance standards and provide protection to minority stockholders' by requiring corporations vested with public interest to have independent directors, among others.
Once signed into law by President Duterte, the remedial legislation is seen to enable a 'business-friendly Philippines' to keep up with its neighbors.
Drilon added that the new Corporation Code will improve ease of doing business in the country by allowing a one-person corporation, removing the minimum capital requirement and providing for perpetual existence of corporation.
'With the new code allowing a one-person corporation, local business owners and investors could already stop the practice of naming their entire household as incorporators simply to comply with the stringent requirement of the law,' added Drilon.
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|Publication:||Business Mirror (Makati City, Philippines)|
|Date:||Nov 30, 2018|
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