The Bangko Sentral ng Pilipinas (BSP) is not playing politics.
BSP officials clarified this yesterday as several mayors claimed that the agency is being used for politics.
The mayors’ claim  stem from a practice where local government units (LGUs) are required to seek opinion from the Monitary Board (MB) before their loans are granted by banks.
According to the BSP, such practice has been done even during the time of the old Central Bank (CB) of the Philippines.
Earlier, some 500 LGUs complained the BSP is “playing politics” because of the sudden adoption of the practice.
The mayors said that while  LGUs are made to wait for MB’s opinion, loan requests of national government agencies are released expeditiously.
The BSP explained that the practice is an old requirement that was revived in 1993.
“That is an old requirement. It was re-enacted in 1993, the year CB was abolished and BSP was created),” said BSP deputy governor for resource management sector and general counsel Juan de Zuñiga.
The LGUs admitted though that there is a clause at RA 7653, the new BSP Act, stating that “whenever government, or any of its political subdivisions or instrumentalities, contemplates borrowing within the Philippines, the prior opinion of the MB shall likewise be requested in order that the Board may render an opinion on the probable effects of the proposed operation on monetary aggregates, the price level, and the balance of payments.”
“The MB opinion on all domestic borrowings of all government agencies and instrumentalities is a requirement of law under the BSP charter. If lending banks didn’t previously require, that is a violation of law. This is not a new requirement,” De Zuñiga told the Daily Tribune.
However, when De Zuñiga was asked by The Tribune if there is a provision in the old CBP charter that requires MB opinion before any entity or LGU can avail themselves of loan, the official answered vaguely,  saying he has no copy of the old CBP charter.
De Zuñiga said even national government agencies that seek loans are asked to request opinion from MB prior to the approval of the loan. Included in the said agencies are AFP, MWSS and even Department of Finance.   
He admitted that there are several LGUs that wait for loan approval but the BSP doesn’t scrutinize the list.
“What I know is there are pending requests for opinion,” he said.   
Under the law, BSP is only allowed to talk to banks, not to clients. But what the BSP is doing  is that it requires banks to submit the list of those that want to borrow and seriously scrutinizes the list, the LGUs said.
The question is do they also require national government agencies to ask opinion from MB or to some LGUs only?
An LGU official who requested anonymity said the agency that handles the list is the Department of Economic Research, not the supervision and examination sector.
He said several lawmakers are inclined  to call BSP officials in a congressional hearing to explain why they are withholding the granting of loans to LGUs.