Angara urges more reforms to shield RP from euro crash

MANILA, Philippines - The Philippines must continue structural reforms in taxation and in financial market, including amendments in the charter of the Bangko Sentral ng Pilipinas (BSP) and in the Collective Investment Schemes Law, to shield the country from the euro crash.

Sen. Edgardo J. Angara, Senate finance committee chairman, said the changes in the BSP charter are needed “for stronger prudential supervision” and in the Collective Investment Schemes Law to update the mutual fund regulation. 

“We need more structural reforms in the financial market and taxation to ensure that our financial system remains resilient,” Angara said. “The credit system cannot stay constricted, depriving entrepreneurs of funds for jobs and income generation.”

He said that “emerging economies like the Philippines remain vulnerable to spillover effects of any downturn experienced by other regions,” like the euro crash which was “prompted by fears over Greece’s mounting external debt, as well as Spain’s and Portugal’s troubled banking system.”

One reform about to go underway, Angara said, is the Credit Information System Act, which the Senate has already passed to help lessen the risk of banks and make credit more available.

This, the senator from Baler, Aurora said, will complement the Personal Equity and Retirement Account (PERA), a supplementary private retirement plan intended to promote long-term savings and capital market development.

Angara also cited the Business Recovery and Insolvency Act, which will modernize the insolvency law and make rehabilitation easier for trouble companies, and the Real Estate Investment Trust which will inject liquidity and stability to the property market.

Earlier, he said, “we have put together the Pre-Need Code to provide the regulatory framework to this importation financial subsector” and “we have also reformed the Philippine Deposit Insurance Corp. charter to expand and extend its protection to bank depositors, and the Pag-IBIG charter to increase its housing loan capacity.”

Angara noted that, “As the once-mighty euro continues to slide down, financial experts and government leaders are becoming worried that a full-blown economic crisis could grip the continent in the coming months.”