News Update Purisima urges BSP to enforce no-tax-no-loan policy
The Bangko Sentral ng Pilipinas must adopt a no-tax-no-loan policy against individuals and corporations that borrow millions of pesos from the banking system but do not pay taxes.
Finance Secretary Cesar Purisima told reporters Tuesday that he asked the Bangko Sentral to be more rigorous in its regulatory stance and mandate banks to enforce a no-tax-no-loan policy.
“I have asked the BSP to require tax payment as sole basis for the granting of loans," Purisima said.
On the fiscal side, Purisima is looking at every possible means to narrow the P325 billion deficit this year.
He scored the practice of big business entities that submit a different tax return for loan purposes and another for the Bureau of Internal Revenue. The practice is unconscionable, he said.
BSP Gov. Amando M. Tetangco Jr. said in a text message that Purisima raised the matter before the policy-making Monetary Board. “This item on proof of tax payments is still in the discussion stage," Tetangco said.
“Banks have their own due diligence process for determining client suitability," according to the central bank chief.
The secretary of finance sits on the Monetary Board on behalf of the government. In the case of Purisima, he has taken over the role of Agusto Santos, Deputy Director General of the National Economic Development Authority. —VS
