The Bangko Sentral will allow banks to borrow overseas without its approval and tighten monitoring of foreign-debt payments, measures that may help boost foreign exchange inflows and limit outflows.

Bangko Sentral will require companies pre-paying foreign-currency debt to seek approval and submit annual plans on their medium- and long-term foreign-currency debt, it said in a statement yesterday. It also allowed banks to use their foreign debt to buy foreclosed assets or state assets.

The measures will make financial markets function “more efficiently,” said Ricky Cebrero, treasurer at East West Banking Corp. “The bias of the regulation is to get more foreign exchange in, which is attuned to the needs of the times, while giving them a better idea of the outflows.”

The central bank also increased penalties for late reporting of registered foreign investments.

Bangko Sentral “is streamlining rules on foreign borrowings” of banks and registration of flows “to improve monitoring of foreign exchange,” Gov. Amando Tetangco said in a statement.

The measures were the third of a series foreign exchange reforms implemented by the central bank since last year.

Most of the latest measures mainly eased the documentary requirements on the purchase of foreign exchange from banks.

They also increased penalties on banks for late reporting of transactions concerning registered foreign investments. They cover 13 main areas from the sale of foreign exchange to residents and tourists, payment of imports and repatriation of remittances and foreign investments to the increase in penalties.

The new regulations, which will take effect in February, raised the penalties for late reporting by 300 percent to 400 percent. Commercial banks will be fined P1,200 a day from P240, P600 from P120 for thrift banks and P180 from P60 per day for rural banks and cooperative banks.

Banks by February will no longer be allowed to submit a report on the sale of foreign exchange for outward investments.

The new rules also delegated the task of registering inward foreign investments in peso-denominated government securities and peso time deposits to custodian banks. Foreign investors putting money in peso- denominated government securities and peso time deposits with tenors of 90 days or longer currently register directly with the central bank. Eileen A. Mencias