The Philippine central bank has opened the way for foreign companies that get a listing in Manila to convert their share-sale proceeds into foreign exchange via the banking system.
The Bangko Sentral ng Pilipinas (BSP) said on Tuesday it has issued a circular that makes clear such conversions of proceeds are permitted.
Diwa Guinigundo, a deputy governor of the BSP, said the central bank is also requiring foreign investments in the local equities market to be registered to allow for outward remittance through the banks of income from such placements.
"The new FX liberalisation policy aims to facilitate cross-border investment transactions consistent with our commitments under the ASEAN Economic Blueprint 2015," Guinigundo said in a text message to reporters.
"The listing and trading of non-resident securities in the domestic market can promote greater confidence in the economy and its capital market," he said.
Monetary authorities said the new rules will address concerns raised after Singapore-based Del Monte Pacific Ltd. became the first company on a foreign bourse to get a Manila listing. It listed 1.297 billion shares in the Philippines.
Wilhelmina Manalac, the central bank's managing director for the international subsector, said the new rules will help deepen the local capital market by encouraging creation of more instruments for domestic investors.
A non-resident company that issues shares in the Philippines through the stock exchange will now be allowed to convert the pesos from it into foreign exchange that can be taken out of the country, Manalac said.
The peso has fallen 5 percent this year against the U.S. dollar, largely because of losses between May and September due to worries about the U.S. Federal Reserve reducing its stimulus. The Indonesian rupiah has been Asia's weakest currency this year, falling 15 percent against the dollar.
The Philippines expects its stock market to participate soon in the electronic trading links that stock exchanges in Singapore, Malaysia and Thailand set up last year.
Indonesia and two markets in Vietnam are also likely to link up in the unified stock exchanges, as the region gears up to take advantage of free flow of capital with the creation of the integrated economic community of the 10-member Association of Southeast Asian Nations by 2015.
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