Bangko Sentral lays down guidelines for Libyan dinar exchange

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) yesterday laid down the guidelines on the exchange of Libyan dinars of overseas Filipino workers (OFWs) who were hurriedly repatriated from strife-torn Libya.

BSP Deputy Governor Diwa Guinigundo said in a press conference that the Monetary Board yesterday approved the opening of a Currency Exchange Facility (CEF) that would allow OFWs evacuated from Libya to exchange Libyan dinars for Philippine pesos as the local currency in the war-torn country led by strongman Moammar Gadhafi is not normally convertible to pesos.

“This is in line with the efforts of the government to assist OFWs displaced by the conflict in Libya,” Guinigundo told reporters.

He pointed out that the central bank had previously established a CEF during similar emergency situations in the Middle East.

The first was in the 1990s during the Kuwait-Iraq war, the second in 2003 in connection with the US-Iraq conflict, and the third in 2006 in connection with the Israel-Hezbollah conflict.

“Access to the CEF was exclusive to returning OFWs who were given a limited period within which to exchange the currencies for pesos and for a limited amount,” the BSP official added.

Under the CEF, each OFW returning from Libya would be allowed to exchange with the BSP or with banks up to a maximum of P10,000 equivalent of Libyan dinars.

The exchange rate yesterday was 1.23 Libyan dinars per US$1.

The limit, he explained, would be subject to periodic review and could be adjusted depending on the demand of the returning OFWs.

He added that OFWs should present documentary proof of their travel from Libya, such as passport or valid travel papers issued and signed by the Philippine embassy and stamped with the date of arrival in the Philippines.

Guinigundo explained that OFWs would have seven banking days from date of their arrival or from the date of the issuance of the BSP Memorandum to All Banks on the implementation of the CEF.

He said OFWs repatriated from Libya would be allowed to convert their Libyan banknotes with banks, the BSP’s Cash Department in Manila, and the BSP Regional Offices/Branches.

“The BSP shall set the exchange rate at which it will buy Libyan dinar from OFWs and banks that purchased said currencies under the CEF,” he explained.

According to him, the rate would be posted daily in the BSP Reference Exchange Rate Bulletin.

Furthermore, he said that banks, particularly those with branch offices at the airports, could extend banking hours to service currency conversion requirements of returning OFWs.

Data from the Department of Foreign Affairs (DFA) showed that there are about 26,000 Filipinos in Libya, where protests calling for the replacement of strongman Gadhafi continue to mount.

The Philippine government has earmarked P130 million for the repatriation of about 13,000 OFWs displaced by the conflict in Libya.

There are only 16 foreign currencies convertible with the BSP, including the US dollar, Japanese yen, British pound, Hong Kong dollar, Swiss franc, Canadian dollar, Singapore dollar, Australian dollar, Bahrain dinar, Kuwait dinar, Saudi Arabian rial, Brunei dollar, Indonesian rupiah, Thai baht, the United Arab Emirates’ dirham, the European Monetary Union’s euro, the Chinese yuan, and the Korean won.

Currencies not convertible with the BSP include Argentina’s peso, Brazil’s real, Denmark’s kroner, India’s rupee, Malaysia’s ringgit, Mexico’s new peso, New Zealand’s dollar, Norway’s kroner, Pakistan’s rupee, South Africa’s rand, Sweden’s kroner, Syria’s pound, Taiwan’s dollar, and Venezuela’s bolivar.

Monetary authorities are closely monitoring developments in the Middle East as countries in the region account for about 16 percent of the amount of money sent home by OFWs.

OFW remittances grew by 8.2 percent to a record $18.76 billion last year from $17.35 billion in 2009 due to the continued demand for skilled Filipino workers abroad as well as the expansion of remittance centers abroad, giving OFWs more options to send money to their loved ones in the Philippines.

Data showed that the Middle East accounted for about 16 percent of total OFW remittances last year. Remittances from the Middle East posted a double-digit growth of 11.2 percent to $2.96 billion last year from $2.66 billion in 2009.

More than half or $1.644 billion came from Saudi Arabia, followed by the United Arab Emirates with $776.3 million, Qatar with $248.8 million, Bahrain with $167.28 million, Kuwait with $106.5 million, Israel with $67.3 million, Oman with $66.76 million.