Professional Documents
Culture Documents
2004 Manual of Regulations For Banks
2004 Manual of Regulations For Banks
FOR BANKS
FOREWORD
Soon after the establishment of the new Bangko Sentral ng Pilipinas (BSP), the Monetary
Board recognized the need not only to update but also to improve the presentation of the
Manual of Regulations for Banks to make it a more useful and accessible information resource
for the banking industry and the interested public. A special committee was therefore created
to revise the old Manual accordingly.
This revised format Manual is the outcome of that effort. It benefits from the inputs of
the many concerned departments of the BSP as well as the various banking industry associations.
By combining a multi-dimensional perspective, we are hopeful that this new Manual and its
subsequent updates will be able to more effectively disseminate the regulatory issuances of the
BSP on a timely basis and provide appropriate guidance to the banking community.
We also believe that it will be a especially useful tool at this time when the BSP has
come up with many new banking regulations and issuances in response to the unprecedented
challenges posed by the Asian crisis.
Nevertheless, we recognize that there will always be room for improvement. Our task
is therefore a continuing one of constant search for a better product to provide better services to
the public.
GABRIEL C. SINGSON
Governor
INSTRUCTIONS TO USERS
The Manual of Regulations for Banks (the Manual) is the comprehensive
authority on the specific subjects covered therein. New rules and amendments to
the rules shall immediately form part of the affected section or subsection of the
Manual while repealed rules shall be deleted so that the user shall no longer refer
to a separate issuance, i.e., circular or memorandum, but shall instead cite the
particular section or subsection of the Manual. Banks shall comply with the
provisions of the Manual and any violation thereof shall be punishable under its
specific and/or general provisions on sanctions.
As a code of regulations, the Manual is divided into six (6) Parts, further
subdivided into major topic headings, which introduce the corresponding sections,
and subsections that make up the provisions governing a particular aspect of
bank operations.
Coding of the Manual provisions utilizes six (6) digits where the first four (4)
digits refer to a Section while the last two (2) digits (if there is any and which is
separated from the first four digits by a period) refer to a Subsection.
The first digit refers to the type of bank to which the regulation is applicable.
"X" denotes a common provision applicable to all types of banks; "1" means
that the regulation is applicable to expanded commercial banks (EKBs) and
commercial banks (KBs), except when the regulation expressly states that it
applies only to an EKB or KB; "2" means that it applies to thrift banks (TBs); and
"3" to rural banks (RBs) and cooperative banks (Coop Banks).
The second digit refers to the Part of the Manual, i.e., "1" refers to
"Organization, Management and Administration"; "2" for "Deposits and Borrowing
Operations"; "3" for "Loans, Investments and Special Credits"; "4" for "Trust,
Other Fiduciary Business and Investment Management Activities; "5" for "Foreign
Currency Deposit System and Other Operations in Foreign Currency"; and "6" for
"Miscellaneous Provisions". The third and fourth digits refer to the main caption
of the provision while the fifth and sixth digits, if any, refer to the subcaption
or subsection under the main caption.
vii
Thus, to illustrate, the code numbers X161.2 and 1162.13 would indicate
Main caption on Records
Subcaption on SFAS
13
viii
PREFACE
The Manual of Regulations for Banks (the New Manual) is not only an
updated edition but also a revised and consolidated version of the first three
volumes of the present Manual of Regulations for Banks and Other Financial
Intermediaries, Books I, II and III (the "Old Manual"). Its adoption was impelled by
certain considerations, namely: (1) that the Central Bank of the Philippines as the
administrative agency of the monetary, banking and credit system which
promulgated the Old Manual has been replaced by the Bangko Sentral Ng Pilipinas
(BSP) as the central monetary authority, (2) that the Old Manual was last updated
as of December 31, 1989 and since that time, significant developments in the
statutory law and the financial system of the country have rendered many of its
provisions obsolete or irrelevant, and (3) that there was need to simplify the code
of banking regulations for ready accessibility to, and the convenience of, the
users.
To accomplish the work of proposing revisions to the Old Manual, the
Monetary Board of the BSP, in its Resolution No. 1203 dated December 7, 1994,
directed the creation of a multi-departmental Ad Hoc Review Committee. This
committee was officially constituted under Office Order No. 2, Series of 1995 and
consisted of Deputy General Counsel Melpin A. Gonzaga (Office of the General
Counsel and Legal Services), as chairman; Deputy Director Ma. Dolores B.
Yuvienco1 (Supervisory Reports and Studies Office); Deputy Director Rolando A.
Q. Agustin (Department of Commercial Banks I); Deputy Director Danilo A.
M o n a s t e r i o 2 (Department of Rural Banks); Deputy Director Erlinda S. J.
Marzan 3 (Department of Thrift Banks and Non-Bank Financial Institutions), as
members; and Managing Director Fe B. Barin (Office of the Monetary Board), as
adviser. The technical staff of the Ad Hoc Committee was composed of Atty.
Magdalena D. Imperio, Bank Attorney III, as head; and Mr. Fernando B. Caballa,
Manager II; Mr. Lauro C. Abuzo, Bank Officer III, Atty. Policarpo G. Barcarse,
Manager II; Mr. Nicanor F. Rillera, Manager II; and Mr. Aristides R. Wylengco,
Manager II, as members. Deputy Governor Armando L. Suratos, the BSP General
Counsel, acted as committee consultant.
Under the aforesaid office order, the Ad Hoc Committee was instructed to
examine, evaluate and review the provisions of the four (4) volumes of the Old
Manual for purposes of (1) deleting therefrom provisions which are obsolete,
redundant, irrelevant, superfluous or inconsistent with law, (2) amending provisions
so as to make them consistent with each other or to harmonize them with existing
statutes, executive issuances and official policies, and (3) reformulating provisions
to make them more responsive to the needs and concerns of the banking and
financial intermediation industry.
In discharging its mandated tasks, the Ad Hoc Review Committee sought the
comments of certain departments of the BSP, particularly, Treasury, Foreign
Exchange, Economic Research, Cash, Accounting, and Loans and Credit, on the
proposed changes to provisions of the Old Manual relevant to their operations.
Likewise consulted were the various associations in the banking industry, such as
the Bankers Association of the Philippines, the Chamber of Thrift Banks, the Rural
Bankers Association of the Philippines and the Trust Officers Association of the
Philippines. Their valuable suggestions contributed much to the accomplishment
of this project.
The New Manual comprises substantially the regulatory issuances of the
BSP, as well as those of its predecessor agency, the Central Bank of the Philippines,
as they were amended or revised through the years, up to December 31, 1996. It
shall serve as the principal source of all substantive banking regulations issued by
the Monetary Board and the Governor of the BSP and shall be cited as the authority
for enjoining compliance with the rules and regulations embodied therein.
It is fervently hoped that the publication of this long-awaited new code of
banking regulations will measure up to the expectations of the Philippine banking
sector.
The Bangko Sentral ng Pilipinas
vi
TABLE OF CONTENTS
PART ONE - ORGANIZATION, MANAGEMENT AND
ADMINISTRATION
A.
SECTION
X101
SECTION
X102
SECTION
X103
X106
(Reserved)
CAPITALIZATION
Bank Capital
X106.1 Minimum capitalization
X106.2 Capital build-up program
X106.3 Memorandum of Understanding; Prompt Corrective
Action Program; sanctions
SECTION
X111
SECTION
X112
ix
X116
Minimum Ratio
X116.1 Qualifying capital
X116.2 Risk-weighted assets
X116.3 Definitions
X116.4 Required reports
X116.5 (Reserved)
1116.5 Market risk capital requirement
2116.5 (Reserved)
3116.5 (Reserved)
X116.6 Sanctions
X116.7 Temporary relief
X119
SECTION
X120
(Reserved)
E.
SECTION
X121
X121.7
X121.8
SECTION
X126
SECTION
1127
SECTION
2127
SECTION
3127
xi
SECTION
X136
Dividends
X136.1 Definitions
X136.2 Requirements on the declaration of dividends
X136.3 Net amount available for dividends
X136.4 Reporting and verification
X136.5 Recording of dividends
X136.6 Issuance of fractional shares
SECTION
1137
(Reserved)
SECTION
2137
(Reserved)
SECTION
3137
SECTION
X141
SECTION
X142
SECTION
X143
xii
SECTION
X144
SECTION
X145
SECTION
X146
SECTION
X147
SECTION
1147
(Reserved)
SECTION
2147
(Reserved)
SECTION
3147
SECTION
X148
(Reserved)
SECTION
X149
SECTION
X150
(Reserved)
H.
SECTION
X151
BANKING OFFICES
Establishment/Relocation/Voluntary Closure/Sale of Branch
X151.1 Prior Monetary Board approval
X151.2 Application for authority to establish branches
X151.3 Prerequisites for the grant of authority to establish a
branch/banking office
X151.4 Branch location
X151.5 Date of opening
X151.6 Requirements for opening a branch
X151.7 Relocation/transfer of branches
X151.8 Voluntary closure/sale of banking offices
X151.9 Sanctions
X151.10 - X151.11 (Reserved)
X151.12 Establishment of branches/loan collection and
disbursement points of microfinance-oriented
banks; establishment of microfinance-oriented
branches/loan collection and disbursement points of
banks that are not microfinance-oriented
X151.13 - X151.14 (Reserved)
X151.15 Relocation/Transfer of branch licenses of closed
banks
xiii
SECTION
X152
SECTION
X153
SECTION
X154
SECTION
X155
Tellering Booths
I.
SECTION
X156
X161
xiv
3161.9
SECTION
X162
Reports
X162.1
X162.2
X162.3
X162.4
X162.5
X162.6
X162.7
X162.8
X162.9
X162.10
X162.11
X162.12
1162.13
2162.13
3162.13
X162.14
X162.15
K.
SECTION
X163
INTERNAL CONTROL
Internal Control System
X163.1 Proper accounting records
X163.2 Independent balancing
X163.3 Division of duties and responsibilities
X163.4 Joint custody
X163.5 Signing authorities
X163.6 Dual control
X163.7 Number control
X163.8 Rotation of duties
X163.9 Independence of the internal auditor
X163.10 Confirmation of accounts
X163.11 Other internal control standards
X163.12 Internal control procedures for dormant/inactive
accounts
xv
SECTION
X164
SECTION
X165
Bank Protection
X165.1 Objectives
X165.2 Designation of security officer
X165.3 Security program
X165.4 Security devices
X165.5 Reports
X165.6 Bangko Sentral inspection
L.
MISCELLANEOUS PROVISIONS
SECTION
X166
SECTION
X167
Business Name
SECTION
X168
Management Contracts
SECTION
X169
SECTION
X170
xvi
X170.3
X170.4
X170.5
X170.6
X170.7
X170.8
X170.9
Compliance risk
Responsibilities of the board of directors and senior
management on compliance
Status
Independence
Role and responsibilities of the compliance function
Cross-border issues
Outsourcing
X180
X196
Voluntary Liquidation
X196.1 Prior Monetary Board approval
X196.2 Liquidation plan
X196.3 - X196.7 (Reserved)
X196.8 Final liquidation report
SECTION
X197
(Reserved)
SECTION
X198
SECTION
X199
X201
DEMAND DEPOSITS
Authority to Accept or Create Demand Deposits
X201.1 Prerequisites to accept or create demand deposits
for Thrift Banks/Rural Banks/Cooperative Banks
X201.2 Requirements for accepting demand deposits
X201.3 Sanctions
xvii
SECTION
X202
SECTION
X203
SECTION
X204
SECTION
1205
(Reserved)
SECTION
2205
SECTION
3205
(Reserved)
SAVINGS DEPOSITS
SECTION
X213
SECTION
X214
Withdrawals
SECTION
X215
(Reserved)
SECTION
X223
SECTION
X224
SECTION
X225
Minimum Features
SECTION
X226
Clearing of NOW
(Reserved)
xviii
D.
TIME DEPOSITS
SECTION
X231
SECTION
X232
SECTION
X233
E.
SECTION
X234
SECTION
X235
SECTION
X236
xix
SECTION
X237
SECTION
X238
SECTION
X239
Issuance of Bonds
X239.1 Definition of terms
X239.2 Compliance with Securities and Exchange
Commission rules on registration of bond issues
X239.3 Notice to Bangko Sentral ng Pilipinas
X239.4 Minimum features
X239.5 Issuance of commercial papers
F.
GOVERNMENT DEPOSITS
SECTION
X240
Statement of Policy
X240.1 Prior Monetary Board approval
X240.2 Banks which may accept government funds
X240.3 Prerequisites for the grant of authority to accept
deposits from the Government and government
entities
X240.4 Application for authority
X240.5 Limits on funds of the Government and government
entities that may be deposited with banks
X240.6 Liquidity floor
X240.7 Exempt transactions
X240.8 Reports
X240.9 Sanctions
X240.10 - X240.14 (Reserved)
X240.15 Acceptance by banks with internet banking facility
of payment of fees for account of government
entities
SECTION
X241
(Reserved)
xx
G. INTEREST
SECTION
X242
SECTION
X243
(Reserved)
SECTION
X253
SECTION
X254
Composition of Reserves
X254.1 Allowable drawings against reserves
X254.2 Exclusion of uncleared checks and other cash items
X254.3 Interest income on reserve deposits
X254.4 Book entry method for reserve securities
SECTION
X255
SECTION
X256
SECTION
X257
SECTION
X258
Report on Compliance
(Reserved)
xxi
I.
SECTION
X261
SECTION
X262
SECTION
X263
SECTION
X264
Unclaimed Balances
SECTION
X265
SECTION
X266
SECTION
1266
(Reserved)
SECTION
2266
(Reserved)
SECTION
3266
SECTION
X267
J.
SECTION
X268
xxii
SECTION
X269
SECTION
X270
SECTION
X271
SECTION
X272
SECTION
X273
SECTION
1274
(Reserved)
SECTION
2274
xxiii
SECTION
3274
SECTION
X275
SECTION
X276
SECTION
1277
SECTION
2277
SECTION
3277
(Reserved)
OTHER BORROWINGS
SECTION
X281
SECTION
X282
SECTION
1283
(Reserved)
SECTION
2283
SECTION
3283
(Reserved)
xxiv
SECTION
1284
(Reserved)
SECTION
2284
(Reserved)
SECTION
3284
X299
(Reserved)
X301
Lending Policies
X301.1 (Reserved)
1301.1 Rules and regulations to govern the development
and implementation of banks' internal credit risk
rating systems
X301.2 - X301.5 (Reserved)
X301.6 Large exposures and credit risk concentrations
SECTION
X302
A.
LOANS IN GENERAL
SECTION
X303
SECTION
X304
SECTION
X305
xxv
X305.3
X305.4
SECTION
X306
SECTION
X307
SECTION
X308
SECTION
X309
Non-Performing Loans
X309.1 Accounts considered non-performing; definitions
X309.2 Reporting requirement
SECTION
X310 (Reserved)
B.
SECURED LOANS
SECTION
X311
SECTION
X312
SECTION
X313
xxvi
SECTION
X314
SECTION
X315
(Reserved)
UNSECURED LOANS
SECTION
X319
SECTION
X320
SECTIONS X321
(Reserved)
D. RESTRUCTURED LOANS
SECTION
X322
(Reserved)
xxvii
E.
SECTION
X326
General Policy
X326.1 Definitions
SECTION
X327
Transactions Covered
SECTION
X328
SECTION
X329
SECTION
X330
Individual Ceilings
X330.1 Exclusions from individual ceiling
SECTION
X331
SECTION
X332
SECTION
X333
SECTION
X334
Procedural Requirements
SECTION
X335
Reportorial Requirements
SECTION
X336
Sanctions
SECTION
X337
SECTION
X338
SECTION
X339
Transitory Provisions
X339.1 - X339.3 (Reserved)
X339.4 Reportorial requirements
SECTION
X340
(Reserved)
xxviii
F.
MANDATORY CREDITS
SECTION
X341
SECTION
X342
X343
Interbank Loans
X343.1
Systems and procedures for interbank call loan
transactions
X343.2
Accounting procedures
X343.3
Settlement procedures for interbank loan transactions
xxix
SECTION
X344
(Reserved)
SECTION
X347
SECTION
X348
SECTION
X349
X361
(Reserved)
Microfinancing Loans
X361.1
Definition
X361.2
Loan limit; amortization; interest
X361.3
Credit information
X361.4
Exemptions from rules on unsecured loans
X361.5
Sanctions
X365
xxx
X365.7
X365.8
X365.9
SECTIONS X366 - X375
Record
Reports to congress
Administrative sanctions
(Reserved)
H.
EQUITY INVESTMENTS
SECTION
X376
Scope of Authority
X376.1
Conditions for investment in equities
X376.2 - X376.4 (Reserved)
X376.5
Guidelines for major investments
SECTION
X377
SECTION
X378
SECTION
X379
SECTION
X380
SECTION
1381
SECTION
X382
xxxi
SECTION
X383
SECTION
X384
(Reserved)
SECTION
X385
Sanctions
I.
(RESERVED)
X388
OTHER OPERATIONS
Purchase of Receivables and Other Obligations
X388.1 Yield on purchase of receivables
X388.2 Purchase of receivables on a "without recourse"
basis
X388.3 Purchase of commercial paper
X388.4 Reverse repurchase agreements with Bangko Sentral
X388.5 Investment in debt and readily marketable equity
securities
(Reserved)
MISCELLANEOUS PROVISIONS
SECTION
X393
Loans-to-Deposits Ratio
X393.1 Statement of policy
X393.2 Other methods of compliance
X393.3 Geographical groupings
X393.4 Lagged computation
X393.5 ROPOA as part of compliance
SECTION
X394
SECTION
X395
SECTION
X396
xxxii
SECTION
1397
SECTION
2397
(Reserved)
SECTION
3397
(Reserved)
SECTION
X398
SECTION
X399
X401
Statement of Principles
SECTION
X402
Scope of Regulations
SECTION
X403
Definitions
A.
SECTION
X404
SECTION
X405
xxxiii
SECTION
X406
SECTION
X407
SECTION
X408
SECTION
X409
SECTION
X410
xxxiv
X411
SECTION
X412
SECTION
X413
Required Surplus
B.
SECTION
X414
SECTION
X415
xxxv
SECTION
X416
SECTION
X417
SECTION
X418
Unsound Practices
SECTION
X419
SECTION
X420
Required Surplus
C.
GENERAL PROVISIONS
SECTION
X421
SECTION
X422
Custody of Assets
SECTION
X423
SECTION
X424
Taxes
SECTION
X425
Reports Required
X425.1 To trustor, beneficiary, principal
X425.2 To the Bangko Sentral
X425.3 Post-Bond Flotation Report
SECTION
X426
Audits
X426.1
X426.2
X426.3
SECTION
X427
SECTION
X428
Receivership
SECTION
X429
X441
Internal audit
External audit
Board action
(Reserved)
xxxvi
X441.6
X441.7
X441.8
X441.9
X441.10
X499
(Reserved)
Sanctions
X501
SECTION
X502
xxxvii
SECTION
X503
(Reserved)
SECTION
X531
Securities Lending
SECTION
X532
X565
X599
(Reserved)
(Reserved)
OTHER OPERATIONS
SECTION
X601
SECTION
X602
Derivatives
X602.1 Scope and pre-qualification requirements
X602.2 Authorized transactions
X602.3 Renewals
X602.4 Risk management guidelines
X602.5 Accounting guidelines
X602.6 Reporting requirements
X602.7 Sanctions
X602.8 - X602.13 (Reserved)
X602.14 Forward and swap transactions
X602.15 Definition of terms
X602.16 Documentation
X602.17 Tenor/maturity of FX forward or swap
xxxviii
SECTION
X603
Clearing Operations
SECTION
X604
SECTION
X605
Miscellaneous Operations
X605.1 Collection and paying agents of the Social Security
System
X605.2 Commercial banks as depository of rediscounting
proceeds
X605.3 Collection agents of PhilHealth
B.
SECTION
X606
SUNDRY PROVISIONS
Bank Premises and Other Fixed Assets
X606.1 Appreciation or increase in book value
X606.2 Ceiling on total investments
X606.3 Reclassification of real and other properties owned
or acquired as bank premises
X606.4 Lease of bank premises
X606.5 - X606.9 (Reserved)
xxxix
SECTION
SECTION
SECTION
SECTIONS
X611 - X620
SECTION
(Reserved)
xl
SECTIONS
X622 - X630
(Reserved)
SECTION
SECTION
2631 (Reserved)
SECTION
3631 (Reserved)
SECTION
SECTION
SECTIONS
X634 - X650
SECTION
(Reserved)
xli
X651.17
X651.18
X651.19
X651.20
Prohibited activities
Amendment
Miscellaneous provision
Report to BSP
SECTIONS
X652 - X653
(Reserved)
SECTION
SECTIONS
X655 - X657
SECTION
SECTIONS
X659 - X690
SECTION
SECTIONS
X692 - X698
SECTION
(Reserved)
(Reserved)
(Reserved)
xlii
04.12.31
LIST OF APPENDICES
No.
SUBJECT MATTER
5a
5b
10
11
12
13
14
15
16
Appendices - Page 1
List of Appendices
04.12.31
No.
SUBJECT MATTER
17
18
Guidelines in Identifying and Monitoring Problem Loans and Other Risk Assets
and Setting Up of Allowance for Probable Losses
19
20
21
Agreement for the Enhanced Interbank Call Loan Funds Transfer System
21a
Settlement Procedures for Interbank Loan Transactions and Purchase and Sale of
Government Securities under Repurchase Agreements with the Bangko Sentral
21b
22
23
24
25
26
27
28
Clearing Procedures
28a
Clearing Operations Between Regional Clearing Center and the Manila Clearing
Center (Tarlac, Tarlac Used as Sample)
29
30
31
Appendices - Page 2
List of Appendices
04.12.31
No.
SUBJECT MATTER
32
Illustrations when a Director, Officer and Stockholder (DOS) shall Waive the Secrecy
of Deposits
33
33a
34
Guidelines on the Use of Scripless (RoSS) Securities as Security Deposit for the
Faithful Performance of Trust Duties
35
36
37
38
39
40
41
42
43
44
Implementing Rules and Regulations of Republic Act No. 6848 (The Islamic
Bank Charter)
45
Notes on Microfinance
46
46a
Appendices - Page 3
List of Appendices
04.12.31
No.
SUBJECT MATTER
46b
47
48
49
50
51
51a
52
Revised Implementing Rules and Regulations - R.A. No. 9160, As Amended by R.A.
No. 9194
52a
52b
52c
53
54
55
56
56a
Appendices - Page 4
List of Appendices
04.12.31
No.
SUBJECT MATTER
57
58
59
60
61
62
63
Appendices - Page 5
X101
01.12.31
PART ONE
ORGANIZATION, MANAGEMENT AND ADMINISTRATION
A.
Part I - Page 1
X101
01.12.31
Part I - Page 2
X101
01.12.31
Part I - Page 3
X101 - X101.2
01.12.31
Part I - Page 4
X101.2 - X101.6
01.12.31
P30,000/day
15,000/day
From TB to RB
Within Metro Manila
Outside Metro Manila
P 5,000/day
500/day
Part I - Page 5
X101.6 - X102.1
01.12.31
Part I - Page 6
X102.1 - X102.2
01.12.31
Part I - Page 6a
X102.2 - X106.1
02.12.31
B. CAPITALIZATION
Part I - Page 6b
X106.1
02.12.31
Part I - Page 6c
X106.1 - X106.2
00.12.31
Part I - Page 7
X106.2 - X106.3
00.12.31
Part I - Page 8
X106.3
00.12.31
Part I - Page 8a
X106.3
00.12.31
Amount of Penalty
UBs/
KBs
TBs
RBs/
Coop Banks
NA
NA
NA
NA
NA
NA
Part I - Page 8b
NA
NA
NA
NA
UBs/
RBs/
Penalty
KBs
TBs Coop Banks
Suspension of securities
NA
NA
and dealership functions
(for UBs only)
Restrictions on lending
NA
to affiliates
Suspension of branching
privileges
Suspension of declaration of cash dividends
Restrictions on overall
loan growth/investments
(new loans to the extent
of collections only)
Denial of access to BSP
rediscounting facilities
Suspension of authority
NA
to accept or create demand
deposits or operate
NOW accounts
Suspension of authority to
accept or handle government deposits
NA
NA
NA
NA
NA
NA
NA
NA
NA
X106.3 - X111.1
00.12.31
Penalty
- Suspension of trust
operations
- Suspension of authority to
accept or create demand
deposits or operate
NOW accounts
UBs/
KBs
TBs
RBs/
Coop Banks
NA
C.
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
MERGER OR CONSOLIDATION
OF BANKS
Part I - Page 8c
X111.2 - X112
00.12.31
Part I - Page 8d
X112
00.12.31
Part I - Page 8e
X112
00.12.31
l. Restructuring/plan of payment of
past due obligations of the proponents with
the BSP as of the date of merger/
consolidation over a period not exceeding
ten (10) years;
m. In the case of RBs, grant of access to
the rediscounting window of the BSP for a
period of two (2) years from the date of
merger or consolidation even if its past due
ratio exceeds twenty-five percent (25%) of
loan portfolio but not exceeding thirty
percent (30%): Provided, That the merged/
consolidated bank meets all the other
requirements. During said period of two (2)
years, its rediscounting limit per application
may also be increased to an amount
equivalent to the total of the rediscounting
limit per application of each of the
constituent banks before merger or
consolidation;
n. Subject to approval of the Monetary
Board concurrent officerships between a
merged or consolidated bank/financial
institution and another bank/financial
institution may be allowed;
Likewise, with prior approval of the
Monetary Board, concurrent directorships
may be allowed in cases where a bank
acquires shares of stock of another bank for
the purpose of merging or consolidating the
two (2) banks regardless of whether the
banks belong to the same category or both
have quasi-banking functions;
o. Subject to other requirements on the
establishment of branches, the merged/
consolidated RBs may be allowed to
establish a branch each in Cebu City and
Davao City if it has put up the minimum
capital requirement for these places;
p. Grant of automatic extension of five
(5) years for retirement of government
preferred shares to be reckoned from the
date of merger or consolidation;
Part I - Page 8f
X112 - X116.1
04.12.31
X116.1 Qualifying capital. The qualifying capital shall be the sum of a. Tier 1 (core) capital (1) Paid-up common stock;
(2) Paid-up perpetual and non
cumulative preferred stock;
(3) Common
stock
dividends
distributable;
(4) Perpetual and non-cumulative
preferred stock dividends distributable;
(5) Surplus;
(6) Surplus reserves;
(7) Undivided profits (for domestic banks
only); and
(8) Minority interest in the equity of
subsidiary financial allied undertakings which
are less than wholly-owned: Provided, That
a bank shall not use minority interests in the
equity accounts of consolidated subsidiaries
as avenue for introducing into its capital
structure elements that might not otherwise
qualify as Tier 1 capital or that would, in
effect, result in an excessive reliance on
preferred stock within Tier 1: Provided,
further, That the following items shall be
deducted from the total of Tier 1 capital:
(a) Common stock treasury shares;
(b) Perpetual and non-cumulative
preferred stock treasury shares;
(c) Net unrealized losses on
underwritten listed equity securities
purchased;
(d) Unbooked valuation reserves and
other capital adjustments based on the latest
report of examination as approved by the
Monetary Board;
(e) Total outstanding unsecured credit
accommodations, both direct and indirect,
to DOSRI;
(f) Deferred income tax; and
(g) Goodwill; and
b. Tier 2 (supplementary) capital which
shall be the sum of
Part I - Page 9
X116.1
04.12.31
Part I - Page 10
X116.1
04.12.31
X116.1
04.12.31
X116.1 - X116.2
04.12.31
X116.2
04.12.31
X116.2
04.12.31
X116.2
04.12.31
X116.2
04.12.31
Interest
Rate Contract
Exchange
Rate Contract
0.0%
1.0%
0.5%
1.5%
5.0%
7.5%
X116.2 - X116.3
04.12.31
X116.3
04.12.31
Highest Rating
AA3 and above
AA- and above
AA- and above
X116.3
04.12.31
X116.3 - X116.6
04.12.31
X116.5 (Reserved)
X116.6 - X119.2
04.12.31
X119.3 - X119.4
04.12.31
X119.4
04.12.31
X119.4
04.12.31
(1) Underwriter/Arranger
(a) Conducts due diligence on the
Issuing Bank and determines the valuation/
pricing of the primary issue;
(b) Prepares the prospectus/information
disclosure, including updates for multitranche USD issues;
(c) Formulates the distribution/allocation
plan for the initial offering and ensures proper
and orderly distribution of the primary
offering of the USD;
(d) Disseminates information to
prospective investors of USD on the terms
and conditions of the issue (including
information of non pre-termination at the
initiative of the holder and the liquidity
mechanism in secondary trading) and the
rights and obligations of the holder, issuer,
Underwriter/Arranger, USD Registry, Selling
Agent, Market Maker and Public Trustee; and
(e) When selling to its clients, it must
perform the functions/responsibilities of the
Selling Agent under Item d(3) hereof.
(2) USD Registry
(a) Keeps unissued USD certificates and
maintains USD Registry book, which must
be electronic if USD is scripless in form;
(b) Records initial issuance of the USD
and subsequent transfer of ownership;
(c) Issues USD Certificates for primary
offerings if USD is not scripless in form;
(d) Issues Registry Confirmation to
buyers/holders;
(e) Functions as paying agent for
periodic interest and principal payments;
(f) Monitors compliance with the
prohibitions on holdings of USD, as
prescribed under Subsec. X119.8 hereof;
and
(g) Submits within ten (10) banking days
from end of reference month, an exception
report on Subsec. X119.8 to the appropriate
supervising and examining department of the
BSP. This report shall be classified as a
Category B report.
X119.4
04.12.31
X119.4
04.12.31
X119.4 - X119.5
04.12.31
X119.5
04.12.31
d. Debt agreement/contract
The Debt Agreement/Contract shall
contain all the terms and conditions on the
issuance of USD and shall conspicuously
state the following caveat:
(1) This USD is not a deposit and is not
insured by the PDIC.
(2) This USD is unsecured and not
covered by a guarantee of the Issuer or
related party of the Issuer.
(3) In case of insolvency, this USD is
subordinated in the right of payment of
principal and interest to all depositors and
other creditors of the bank, except those
creditors expressed to rank equally with, or
behind holders of the USD.
(4) This USD is not eligible as collateral
for a loan made by the Issuing Bank, its
subsidiaries or affiliates.
(5) This USD cannot be terminated by
the holder nor by the Issuing Bank before
(maturity date).
(Item d(5) above shall apply if the
Issuing Bank commits no pre-termination of
the USD. Otherwise it shall read as follows):
This USD cannot be terminated by the
holder before (maturity date). However, it
may be pre-terminated at the instance of the
Issuing Bank upon:
(a) Prior approval of the BSP subject to
the following conditions:
(i) The banks capital adequacy ratio is
at least equal to the required minimum
capital ratio; and
(ii) The debt is simultaneously replaced
with the issues of new capital which is neither
smaller in size nor of lower quality than the
original issue.
(b) Prior notice to investors/buyers.
(6) This USD cannot be sold or
transferred and must be held on to maturity
by the investor/buyer (in case of negotiated
issuance of USD to nineteen (19) or less
investors/buyers).
X119.5 - X119.6
04.12.31
X119.6 - X119.9
04.12.31
X119.9 - X119.13
04.12.31
X120 - X121.2
04.12.31
X121.2 - X121.3
96.12.31
of origin. The bank is considered as widelyowned if it has at least fifty (50) stockholders
without any stockholder owning more than
fifteen percent (15%) of its capital stock:
Provided, That if the bank is owned/
controlled by a holding company, this
requirement shall apply to the holding
company; and
(2) Among the top 150 banks in the world
or the top five (5) banks in its country of
origin.
The determination of the top 150 banks
in the world may be based on lists prepared
and published by reputable organizations/
publications.
The determination of the top five (5) banks
in the country of origin shall be based on
information supplied by the bank supervisory
authorities in which country of origin as to
the ranking of banks based on net worth.
However, the Monetary Board may also use
total assets as a criterion: Provided, That the
same shall be based on book accounts only
and on the consolidated balance sheet of the
head office and all branches, excluding
subsidiaries and affiliates.
In addition to the foregoing requirements,
the foreign bank applicant must be in
compliance with capital requirements as
prescribed by the laws and regulations of its
country of origin.
X121.3 Guidelines for selection. The
following factors shall be considered in
selecting the foreign bank which will be
allowed to invest in majority of the voting
stock of an existing domestic bank or to
establish a subsidiary or branch in the
Philippines.
a. Geographic representation and
complementation. Representation from the
different parts of the world and/or the
Part I - Page 11
X121.4
96.12.31
Part I - Page 12
X121.4 - X121.5
99.12.31
Part I - Page 13
X121.6 - X121.9
96.12.31
Part I - Page 14
X121.9 - X121.11
96.12.31
Part I - Page 15
X121.12 - X126.1
02.12.31
Part I - Page 16
X126.1 - X126.2
02.12.31
Part I - Page 17
X126.2
02.12.31
Part I - Page 18
X126.2 - X126.3
04.12.31
Part I - Page 19
X126.4 - X126.5
04.12.31
Part I - Page 20
X126.5
03.12.31
Part I - Page 21
X126.5 - 1127.1
03.12.31
Part I - Page 22
1127.1 - 3127.2
03.12.31
3127.2 - 3127.4
00.12.31
Part I - Page 23
3127.4 - X136.1
04.12.31
Part I - Page 24
X136.1 - X136.4
04.12.31
Part I - Page 25
X136.4 - 3137
04.12.31
Part I - Page 26
3137
04.12.31
b. Coop Banks
(1) Interest on share capital (a) Interest on share capital shall be
declared only upon compliance with the
requirements prescribed under Sec. 3137a.
(b) Government preferred shares shall be
entitled to interest as enumerated in Subsec.
3137.1: Provided, That no cumulative
interest shall be allowed for any kind or class
of share issued by the Coop Bank.
Unless otherwise provided for in the bylaws of the Coop Bank, the share capital shall
earn interest at the rate computed as follows:
Rate of Interest = X (Net Surplus less
Statutory Reserves) (Total Average
Share Month)
where:
(i) X shall be a percentage to be determined by the board of directors allocated
for interest on share capital; and
3137 - X141
04.12.31
Part I - Page 27
X141.1
03.12.31
X141.1 Definition/limits
a. Definition of directors. Directors shall
include:
(1) directors who are named as such in
the articles of incorporation;
(2) directors duly elected in subsequent
meetings of the stockholders; and
(3) those elected to fill vacancies in the
board of directors.
b. Limits on the number of the members
of the board of directors. Pursuant to Sections
15 and 17 of the R.A. No. 8791, there shall
be at least five (5), and a maximum of fifteen
(15) members of the board of directors of a
bank at least two (2) of whom shall be
independent directors: Provided, That in case
of a bank/quasi-bank/trust entity merger or
consolidation, the number of directors may
be increased up to twenty-one (21).
An independent director shall mean a
person who
(1) Is not or has not been an officer or
employee of the bank its subsidiaries or
affiliates or related interests during the past
three (3) years counted from the date of his
election;
(2) Is not a director or officer of the
related companies of the institutions majority
stockholder;
(3) Is not a majority stockholder of the
institution, any of its related companies, or
of its majority shareholders;
(4) Is not a relative within the fourth
degree of consanguinity or affinity, legitimate
or common-law of any director, officer or
majority shareholder of the bank or any of
its related companies;
(5) Is not acting as a nominee or
representative of any director or substantial
shareholder of the bank, any of its related
companies or any of its substantial
shareholders; and,
(6) Is not retained as professional adviser,
consultant, agent or counsel of the institution,
Part I - Page 28
X141.1 - X141.2
04.12.31
Part I - Page 29
X141.2 - X141.3
04.12.31
Part I - Page 30
X141.3
04.12.31
__________________
2
X141.3
04.12.31
X141.3
04.12.31
X141.3
04.12.31
X141.3 - X141.10
04.12.31
Position Level
Directors, Senior Vice
President and above
of UBs and KBs, as
well as the Directors,
President, Chief
Executive Officer,
Chief Operating
Officer, Senior Vice
President or quivalent
rank of TBs, IBs, RBs
and Coop Banks with
total assets of at least
P1 billion.
b. A Committee to
be composed of:
The Deputy
Governor - SES
Managing
Directors of SE I
and II
Directors of the
concerned
supervising and
examining
department of SES
X141.10 - X143
04.12.31
Amount
P 30,000
15,000
5,000
1,000
X143.1
04.12.31
X143.1 - X143.3
04.12.31
X143.3 - X143.4
04.12.31
X143.4 - X143.5
04.12.31
X143.5 - X144
04.12.31
X144 - X145
04.12.31
Part I - Page 31
X145 - X146
04.12.31
Part I - Page 32
government or government-owned or
controlled entities.
Sec. X146 Profit Sharing Programs. Profit
sharing programs adopted in favor of
directors, officers and employees shall be
reflected in the by-laws of the bank, subject
to the following guidelines:
a. The base in any profit sharing
program shall be the net income for the year
of the bank as shown in its Consolidated
Statement of Income and Expenses for the
year, net of the following:
(1) All cumulative dividends accruing to
preferred stock to the extent not covered by
earned surplus;
(2) Accrued interest receivable credited
to income but not yet collected, net of
reserves already set up for uncollected
interest on loans;
(3) Unbooked valuation reserves on loans
or the amount required to update valuation
reserves in accordance with the schedule
approved by the Monetary Board, as well as
all amortizations due on deferred charges;
(4) Provisions for current years taxes;
(5) Income tax deferred for the year.
Provided, however, That in case of reversal
of deferred income taxes which were
deducted from net income in computing for
profit sharing of previous years, the deferred
income tax reversed to expense shall be
added back to net income to arrive at the
base for profit sharing for the year during
which the reversal is made;
(6) Accumulated profits not yet received
but already recorded by a bank representing
its share in profits of its subsidiaries under
the equity method of accounting; and
b. The bank may provide in its by-laws
for other priorities in the computation of net
profits for purposes of profit sharing:
Provided, That in no case shall profit sharing
take precedence over any of the items in the
preceding paragraph; and
X146 - X147
04.12.31
X147 - X149
02.12.31
Part I - Page 33
X149 - X150
02.12.31
Part I - Page 34
X151 - X151.2
03.12.31
H. BANKING OFFICES
Sec. X151 Establishment/Relocation/
Voluntary Closure/Sale of Branch. The
following rules shall govern the
establishment, relocation, voluntary closure
or sale of local branches of banks.
For purposes of this Section, branches
shall refer to branches, agencies or extension
offices outside of a banks head office.
Pending issuance of a new set of guidelines on the establishment of new branches,
there shall be a moratorium on the
establishment of new branches, except as
follows:
(1) In cities and municipalities where
there are no existing banking offices;
(2) In any place in the Philippines by
merged/consolidated banks as one of the
incentives for consolidations and mergers:
Provided, That merged/consolidated RBs
may establish a branch each in Cebu City
and Davao City only if they have put up the
minimum capital requirement for these
places, and a branch in Greater Manila Area
only if their capital is at least equal to the
capital requirements for new TBs in Metro
Manila; and
(3) Branches of microfinance-oriented
banks.
(4) Branches that will cater primarily to
the credit needs of Barangay Micro Business
Enterprises (BMBEs) under Sec. X365:
Provided, That at least seventy percent (70%)
of the deposits generated by said branches
shall be lent out to BMBEs and their
outstanding loans to BMBEs shall at all times
be at least fifty percent (50%) of their gross
loan portfolio.
The moratorium shall apply to all
applications for establishment of new
branches, including pending ones received
prior to August 16, 1999. It shall also apply
to applications for (a) conversion of a branch
Part I - Page 35
X151.2 - X151.3
03.12.31
UB/ KB
TB
RB
Coop Bank
P20
P10
NA
NA
NA
NA
P5
P5.0
P20
P10
P2.5
P2.5
P10
P5
P1.25
P1.25
P10
P5
P.5
P.5
P10
P5
P1.25
P1.25
P10
P3
P.5
P.5
P10
None
None
None
Part I - Page 36
X151.4 - X151.6
02.12.31
X151.6 - X151.8
02.12.31
X151.8 - X151.12
02.12.31
P 500,000
P 250,000
X151.12
02.12.31
Amount
P20
5
2.5
X151.12
04.12.31
X151.13 - X153.1
03.12.31
X153.1 - X153.4
98.12.31
Part I - Page 37
X153.5 - X154.3
98.12.31
Part I - Page 38
X154.3 - X154.5
98.12.31
X154.5 - X156
03.12.31
Part I - Page 39
X156 - X161
03.12.31
Part I - Page 40
J.
X161.1
03.12.31
X161.1 - X162
02.12.31
BSP- prescribed Manual of Accounts:
Provided, further, That the mathematical
formulas for reconciling such published
statements and submitted reports with the
general ledger accounts of the bank are
submitted to the appropriate supervising and
examining department of the BSP: Provided,
finally, That said banks prepare for BSP use,
reconciliations of their ledger accounts with
the BSP prescribed Manual of Accounts
during regular or special bank examinations.
Any bank which fails or refuses to adopt
the prescribed Manual of Accounts, or any
of the applicable accounts contained therein,
or adopts any general ledger account not
specified in the said Manual of Accounts
without prior written approval of the
Governor of the Bangko Sentral, shall be
penalized by revocation or suspension of its
authority to engage in quasi-banking
function.
Part I - Page 41
X162.1 - X162.2
02.12.31
Part I - Page 42
X162.2
03.12.31
(i) UBs/KBs/FXBs
- P 1,000;
(ii) TBs
500;
(iii) RBs/Coop Banks
250;
per business day of default until report is filed
with the BSP; and
(b) For Category B reports
(i) UBs/KBs/FXBs
- P 240;
(ii) TBs
120;
(iii) RBs/Coop Banks
60;
per business day of default until report is filed
with the BSP.
In the implementation of the foregoing
rules, delay or default shall start to run on
the day following the last day required for
the submission of reports. However, should
the last day of filing fall on a non-working
day in the locality where the reporting bank
is situated, delay or default shall start on the
day following the next banking day. The due
date/deadline for submission of reports to
BSP as prescribed under Sec. X162
governing the frequency and deadlines
indicated in Appendix 6 shall be
automatically moved to the next banking day
whenever a half-day suspension of business
operations in government offices is declared
due to an emergency such as typhoon,
floods, etc.
Delayed schedules/attachments and
amendments shall be considered late
reporting subject to the above penalties.
(2) Manner of filing. For the purpose
of establishing delay or default, the
submission of reports shall be effected by
filing them with the appropriate supervising
and examining department of the BSP or with
the BSP Regional Offices, or by sending them
by registered mail or by special delivery
through a private courier, unless otherwise
specified in the circular or memorandum of
the BSP.
In the first case, the date of
acknowledgment by the appropriate
supervising and examining department of the
BSP or the BSP Regional Office appearing on
Part I - Page 43
X162.2 - X162.4
03.12.31
Part I - Page 44
X162.4
03.12.31
X162.4 - X162.7
02.12.31
Part I - Page 45
X162.8 - X162.9
02.12.31
Part I - Page 46
X162.9
02.12.31
Part I - Page 47
X162.9 - X162.11
02.12.31
March
June
Net Income
After Tax
Quarter end net
income after tax
multiplied by 4.
Semester end net
income after tax
multiplied by 2.
Part I - Page 48
Average TotalCapital
Accounts
Sum of end-month capital
accounts (December March) divided by 4.
Sum of end-month capital
accounts (December June) divided by 7.
Sept.
Dec.
X162.11 - 1162.13
03.12.31
1162.13 - X163
04.12.31
2162.13 (Reserved)
3162.13 (Reserved)
X163 - X163.2
04.12.31
X163.2 - X163.3
96.12.31
Part I - Page 49
X163.4 - X163.6
96.12.31
Part I - Page 50
X163.6 - X163.8
96.12.31
Part I - Page 51
X163.8 - X163.11
04.12.31
Part I - Page 52
X163.11 - X164
04.12.31
Part I - Page 53
X164 - X164.3
04.12.31
Part I - Page 54
X164.3
04.12.31
X164.4
04.12.31
Where:
Net
= Total Interest Income Total Interest Income
Interest
Income
Average = Sum of Total Interest Earning Assets as of the
Interest
12 month-ends in the calendar/fiscal year
adopted by the Bank
12
Part I - Page 55
X164.5 - X165.4
99.12.31
Part I - Page 56
X165.4 - X167
00.12.31
Part I - Page 57
X167 - X169.2
00.12.31
Part I - Page 58
X169.2
00.12.31
Part I - Page 59
X169.2 - X169.3
03.12.31
Part I - Page 60
X169.3 - X169.11
03.12.31
Part I - Page 61
X169.11 - X170.1
03.12.31
Part I - Page 62
X170.1 - X170.4
04.12.31
Part I - Page 63
X170.5 - X170.9
04.12.31
Part I - Page 64
X170.9 - X180
04.12.31
Part I - Page 65
X180 - X196.2
04.12.31
Part I - Page 66
X196.2 - X199
04.12.31
Part I - Page 67
X201 - X201.3
02.12.31
PART TWO
DEPOSIT AND BORROWING OPERATIONS
A. DEMAND DEPOSITS
Section X201 Authority to Accept or
Create Demand Deposits. Banks may accept
or create demand deposits subject to
withdrawal by check.
A UB/KB may accept or create demand
deposits subject to withdrawal by check,
without prior authority from the BSP.
A TB/RB/Coop Bank may accept or create
demand deposits upon prior authority of the
BSP.
X201.1 Prerequisites to accept or
create demand deposits for Thrift Banks/
Rural Banks/Cooperative Banks. In
addition to the Standard Pre-qualification
Requirements for the Grant of Banking
Authorities enumerated in Appendix 5, a TB/
RB/Coop Bank applying for authority to
accept or create demand deposits shall also
comply with the following requirements:
a. The applicant TB must have complied
with the minimum capital required under
Subsecs. X106.1 and X106.2.
In the case of RB/Coop Bank, it must have
net assets of at least P5 million: Provided,
That RBs which have been authorized to
accept or create demand deposits prior to the
approval of R.A. No. 7353 (Rural Banks Act
of 1992) shall be allowed to continue
servicing such deposits.
The terms capital and net assets shall have
the same meaning as in Sec. X106.
b. It must be a member of the
Philippine Deposit Insurance Corporation
(PDIC) in good standing.
X201.2 Requirements for accepting
demand deposits. After a TBs/RBs/Coop
Banks application to accept demand
deposits has been approved, it may actually
Manual of Regulations for Banks
Part II - Page 1
X202 - X203
02.12.31
Part II - Page 2
X203
99.12.31
Part II - Page 3
X203 - 2205
99.12.31
Part II - Page 4
2205 - X213
99.12.31
Part II - Page 4a
X213 - X214
99.12.31
Part II - Page 4b
X214 - X215
99.12.31
Part II - Page 4c
X215 - X223.2
02.12.31
Part II - Page 5
X223.2 - X232
04.12.31
Part II - Page 6
X232 - X233.4
04.12.31
NCTD s.
Part II - Page 7
X233.5 - X233.9
01.12.31
Part II - Page 8
X233.9
01.12.31
Part II - Page 8a
X233.9
01.12.31
Part II - Page 8b
X233.9
01.12.31
Part II - Page 8c
X233.9 - X233.10
01.12.31
Part II - Page 8d
X233.11 - X234.2
01.12.31
E. DEPOSIT SUBSTITUTE
OPERATIONS
(QUASI-BANKING FUNCTIONS)
Sec. X234 Scope of Quasi-Banking
Functions. The following rules and
regulations shall govern the quasi-banking
operations of banks.
X23 4 . 1 E l e m e n t s o f q u a s i banking. The essential elements of quasibanking are:
a. Borrowing funds for the borrowers
own account;
b. Twenty (20) or more lenders at any
one time;
c. Methods of borrowing are issuance,
endorsement, or acceptance of debt
instruments of any kind, other than
deposits, such as acceptances, promissory
notes, participations, certificates of
assignments or similar instruments with
recourse, trust certificates, repurchase
agreements, and such other instruments as
the Monetary Board may determine; and
d. The purpose of which is (1)
relending, or (2) purchasing receivables or
other obligations.
X234.2 Definition of terms and
phrases. The following terms and phrases
shall be understood as follows:
a. Borrowing shall refer to all forms of
obtaining or raising funds through any of
the methods and for any of the purposes
provided in Subsec. X234.1 whether the
borrowers liability thereby is treated as
real or contingent.
b. For the borrowers own account
shall refer to the assumption of liability in
ones own capacity and not in
representation, or as an agent or trustee, of
another.
Part II - Page 8e
X234.2 - X234.3
01.12.31
Part II - Page 8f
X234.3 - X234.5
04.12.31
Part II - Page 9
X234.5 - X235.1
04.12.31
Part II - Page 10
in case, the TB has no approved capital buildup program, the minimum capital
requirement may be substituted by a capital
build-up program for a period of not more
than five (5) years from 11 November 2004
and which must be approved by the
Monetary Board. Such capital build-up
program shall be in equal annual or
diminishing amounts and shall be submitted
to the appropriate supervising and examining
department of the BSP within three (3) months
from 11 November 2004.
TBs which fail to comply with the
required capitalization upon expiration of
said two (2) year period given them or those
which fail to comply with approved capital
build-up program shall liquidate their quasibanking operations within one (1) year and
shall be considered revoked/cancelled. The
license of a TB with authority to engage in
quasi-banking functions but has not actually
engaged in quasi-banking functions and has
not complied with the above minimum
capital requirements as of 11 November
2004, shall automatically be revoked.
Sec. X235 Deposit Substitute Instruments
Any deposit substitute transaction by a bank
performing quasi-banking functions shall be
limited to its own promissory notes,
repurchase agreements, and certificates of
assignment/participation with recourse.
X235.1 Prohibition against use of
acceptances, bills of exchange and trust
certificates. Acceptances, bills of exchange,
and trust certificates shall not be used by
banks as evidence of deposit substitute
liabilities in connection with their quasibanking functions. This prohibition shall not
apply to the acceptance or negotiation of bills
of exchange in connection with trade
transactions, or to the issuance of trust
certificates creating trust relationships.
X235.2 - X235.3
04.12.31
Part II - Page 11
X235.3 - X235.6
04.12.31
Amendments under Circular 392 dated 23 July 2003 shall take effect on 01 January 2005 for all securities transactions,
regardless of the date of their execution under Circular 460 dated 12 November 2004.
1
Part II - Page 12
X235.6 - X237.2
04.12.31
Part II - Page 13
X237.2 - X238.1
04.12.31
Part II - Page 14
X238.1 - X238.3
04.12.31
X238.3 - X239.4
04.12.31
X239.4 - X240
04.12.31
X240 - X240.2
96.12.31
Part II - Page 15
X240.2 - X240.5
96.12.31
Part II - Page 16
X240.5 - X240.6
04.12.31
Part II - Page 17
X240.6 - X240.9
04.12.31
Part II - Page 18
X240.9 - X242.2
04.12.31
Part II - Page 19
X243 - X254
04.12.31
RBs/
UBs/KBs TBs Coop Banks
a. Demand
Deposits
b. NOW Accounts
c. Savings
Deposits
d. Time Deposits, )
Negotiable CTDs, )
Long-Term Non- )
Negotiable Tax- )
Exempt CTDs )
Long-term NCTDs
e. Deposit
Substitutes
f. IBCL
(Sec. X343)
g. Bonds
h. Mortgage/
CHM cert.
9%
9%
6%
6%
6%
6%
9%
6%
2%
9%
6%
2%
2%
2%
2%
9%
0%
6%
0%
NA
0%
5%
5%
NA
NA
5%
NA
From 8% to 10% under Circular 418 dated 05 February 2004 effective 06 February 2004.
Part II - Page 20
X253.2 - X254
04.12.31
Part II - Page 21
X254 - X255
04.12.31
Part II - Page 22
X255 - X257
04.12.31
X257 - X257.3
02.12.31
X257.2
Failure to cover
overdrawings with the Bangko Sentral
Any bank which incurs an overdrawing in
its deposit account with the BSP shall fully
cover said overdraft not later than the next
clearing day including interest thereon
equivalent to one-tenth of one percent (1/
10 of 1%) per day or the prevailing ninetyone (91) day Treasury Bill plus three (3)
percentage points, whichever is higher. In
case a bank fails to cover its overdrawings,
it shall be excluded from clearing on such
day and it shall also be denied the credit
facilities of the BSP. Such exclusion from
clearing shall continue for as long as it has
not maintained credit balances with the
BSP for at least five (5) consecutive banking
days. If its clearing account is overdrawn
for five (5) consecutive banking days, it shall
be prohibited from (a) making new loans
or investments, except investment in
government securities with BSP support;
(b) declaring cash dividends until it has
maintained credit balances in its BSP
clearing account for at least fifteen (15)
consecutive banking days; and (c)
establishing branches. The denial from
availment of credit facilities of the BSP shall
continue for as long as the bank maintained
credit balances with the BSP for at least
fifteen (15) consecutive banking days.
For purposes of computing the total
available reserves against deposit/deposit
substitute liabilities, the total amount of
overdrawing in the clearing account with the
BSP shall be deducted from available reserves
after the required reserves against deposit/
deposit substitute liabilities shall have been
satisfied.
X257.3 Payment of penalties on
reserve deficiencies. Penalties if unpaid
within fifteen (15) days from receipt of
* The reserve weeks, December 20 to 26, 2002 and December 27, 2002 to January 2, 2003, shall be considered as a
single reserve week for the purpose of determining abuse of the privilege of offsetting reserve deficiencies against excess
reserves during the reserve week.
Part II - Page 23
X257.3 - X261.5
02.12.31
Part II - Page 24
X261.5 - X264
03.12.31
Part II - Page 25
X264 - X266
03.12.31
Part II - Page 26
X266 - 3266
03.12.31
Part II - Page 27
3266 - X268.1
03.12.31
Part II - Page 28
X268.1 - X268.10
03.12.31
Part II - Page 29
X268.10 - X269.2
03.12.31
Part II - Page 30
X269.2 - X269.7
03.12.31
X269.7 - X269.10
03.12.31
X269.10 - X269.11
03.12.31
X269.12 - X271.3
03.12.31
X271.3 - X272.1
03.12.31
X272.1 - X272.4
96.12.31
Part II - Page 31
X272.5 - X272.10
96.12.31
Part II - Page 32
X272.10 - X2274
99.12.31
Part II - Page 33
3274 - 2277
02.12.31
Part II - Page 34
3277 - 3277.1
02.12.31
Sec. 3277
Rediscounting Window
Available to Rural and Cooperative Banks
for the Purpose of Providing Liquidity
Assistance to Support and Promote
Microfinance Programs. The following
guidelines shall govern the rediscounting
facility available to RBs and Coop Banks for
the purpose of providing liquidity assistance
to support and promote microfinance
programs.
3277.1 Eligibility requirements
a. Eligible borrowers . RBs and Coop
Banks with at least one (1) year track record
in microfinance and at least 500 active
borrowers, ratio of past due microfinance
loans to total outstanding microfinance loans
of not more than five percent (5%) as of end
of the month preceding loan application and
collection ratio of not less than ninety-five
percent (95%) based on ratio of total
collections (excluding prepayments) during
the preceding twelve (12)-month period to
the sum of past due microfinance loans at
the beginning of said period and amount of
matured loans including principal
amortizations during the same twelve (12) month period.
b. Eligible papers. Promissory Note
(PN) of the RB or Coop Bank executed in
favor of the BSP and secured by duly
endorsed PN of microcredit borrowers.
c. Manual of operations. Written
policies on microfinance operations must be
set forth and documented in a policy manual
duly approved by the banks board of
directors. The manual should include the
following minimum features:
(1) Scope of microfinance activities and
the types of services or products offered to
clients;
(2) Authorities and responsibilities of:
(a) Board of directors;
(b) Management;
3277.1 - 3277.3
02.12.31
3277.3 - 3277.5
02.12.31
3277.6 - X280
02.12.31
X281 - X299
03.12.31
K. OTHER BORROWINGS
Sec. X281 Borrowings from the
Government. Except as may be authorized
by existing statutes, no private bank shall,
whether or not performing quasi-banking
functions, borrow any fund or money from
the Government and government entities,
through the issuance or sale of its
acceptances, notes or other evidences of
debt.
X281.1 Exemption from reserve
requirement. The following borrowings shall
not be subject to the reserve requirements:
a. Special time deposits (STDs) and
deposit substitutes of specialized government
banks and private banks arising from their
lending operations under the special
financing programs of the Government and/
or international financial institutions; and
b. Funds held by participating financial
institutions (PFIs) under the GSIS Housing
Loan Programs: Provided, That the
agreement between the GSIS and the conduit
banks specify that such funds may be held
by the conduit banks for a period of not more
than seven (7) calendar days prior to their
release to the borrower and prior to the
remittance by the conduit banks of payments
to the GSIS.
Sec. X282 Borrowings from Trust
Departments or Investment Houses. Funds
borrowed by banks or non-bank financial
intermediaries performing quasi-banking
functions from trust departments or managed
funds of banks or investment houses are
not considered as interbank borrowings and
therefore are subject to the:
a. Reserve requirement on deposit
substitutes;
Part II - Page 35
X301 - 1301.1
04.12.31
PART THREE
LOANS, INVESTMENTS AND SPECIAL CREDITS
Section X301 Lending Policies. It shall
be the responsibility of the board of directors
of a bank to formulate written policies on
the extension of credit and risk diversification
and to set the guidelines for evaluation of
risk assets. Well-defined lending policies and
sound lending practices are essential if a bank
is to perform its lending function effectively
and minimize the risk inherent in any
extension of credit. The responsibility should
be approached in a way that will provide
assurance to the public, the stockholders and
supervisory authorities that timely and
adequate action will be taken to maintain the
quality of the loan portfolio and other risk
assets.
X301.1 (Reserved)
1301.1 Rules and regulations to govern
the development and implementation of
banks internal credit risk rating systems
a. Statement of policy. It is the policy
of the BSP to ensure that banks credit risk
management processes are sound and
effective. Towards this end, the following
rules and regulations that shall govern the
use of banks internal credit risk rating
systems are hereby prescribed.
b. Scope. UBs and KBs must have in
place a formal internal credit risk rating
system for the underwriting and ongoing
administration, initially, of corporate credit
exposures. The internal credit risk rating
system must be appropriate to a banks
nature, complexity and scale of activities.
Initially and until such time that the
Monetary Board prescribes otherwise,
1301.1 - X301.5
04.12.31
X301.6
04.12.31
X301.6 - X302
04.12.31
X302 - X303
04.12.31
X303
04.12.31
X303 - X303.1
04.12.31
X303.1 - X303.2
04.12.31
X303.3 - X303.5
04.12.31
X303.5 - X304.2
04.12.31
b. Other sanctions
First Offense Reprimand for the
directors/officers who approved the credit
availment which resulted in the excess with
a warning that subsequent violations will be
subject to more severe sanctions.
Subsequent offenses
(1) Fine of P1,000.00 for directors/
officers who approved the credit availment
which resulted in the excess.
(2) Suspension of the banks branching
privileges and access to BSP rediscounting
facilities until the excess is eliminated.
(3) Other penalties as the Monetary
Board may impose depending on the gravity
of the offense.
Transitory provision. Outstanding credit
commitments of a bank as of 2 May 2004
which are within the ceiling prescribed under
the regulations existing prior to said date but
will exceed the limitations prescribed in this
Section shall not be subject to penalty for a
period of one (1) year or until said credit
commitments become past due or are
extended, renewed or restructured
whichever comes later: Said credit
commitments shall, however, be reported to
the Bangko Sentral within fifteen (15)
banking days from 2 May 2004.
X303.6 X303.7 (Reserved)
X303.8 Limit for wholesale lending
activities of government banks. There shall
be a separate SBL of thirty-five percent (35%)
of unimpaired capital and surplus for the
wholesale lending activities of government
banks to participating financial institutions
(PFIs) for relending to end-user borrowers,
subject to the following guidelines:
a. Government banks SBL of thirty-five
percent (35%) of unimpaired capital and
surplus shall apply only to loans granted to
PFIs on a wholesale basis for on-lending to
end-user borrowers;
X304.2 - X305.3
04.12.31
X305.3 - X306.1
04.12.31
X306.1
04.12.31
Mode of Payment
Minimum No.
of Installments
In Arrears
Monthly
3
Quarterly
1
Semestral
1
Annual
1
Provided, however, That when the total
amount of arrearages reaches twenty percent
(20%) of the total outstanding balance of the
loan/receivable, the total outstanding balance
of the loan/receivable shall be considered as
past due, regardless of the number of
installments in arrears: Provided, further, That
X306.2 - X306.6
04.12.31
X307
04.12.31
X307 - X307.1
99.12.31
X307.1 - X307.4
98.12.31
X307.4 - X309.1
03.12.31
X309.1 - X311.1
03.12.31
B. SECURED LOANS
Sec. X311 Loans Secured by Real Estate
Mortgages. Loans against real estate security
shall not exceed seventy percent (70%) of
the appraised value of the respective real
estate security plus seventy percent (70%) of
the appraised value of insured improvements,
and such loans shall not be made unless title
to the real estate is in the mortgagor.
In the case of UBs/KBs, the loan values
of real estate given as security for any loan
granted shall be reduced from seventy
percent (70%) to not more than sixty percent
(60%) of the appraised value of the real estate
security and the insured improvements,
except the following which shall be allowed
a maximum value of seventy percent (70%)
of the appraised value:
a. Any loan not exceeding P3.5 million
to finance the acquisition or improvement
of residential units; and
b. Housing loans extended or
guaranteed under the governments National
Shelter Program (NSP) such as the Expanded
Housing Loans Program (EHLP) of the Home
Development Mutual Fund (HDMF or PagIBIG Fund) and the mortgage and guaranty
and credit insurance program of the Home
Insurance and Guaranty Corporation (HIGC).
X311.1 Loans secured by junior
mortgage on real estate. Banks may also
grant loans on the security of junior
mortgages on real estate: Provided, That for
such loans to be considered as adequately
secured under Sections 37 and 38 of R.A.
No. 8791, the sum total of the loans to be
granted and the outstanding balance of the
loan granted on the senior mortgage shall not,
at any time, exceed the loan value of subject
real estate security based on the appraisal of
the real estate by the junior mortgagee.
X311.1 - 3311.2
03.12.31
1311.2 (Reserved)
2311.2 (Reserved)
3311.2 Eligible real estate
collaterals on rural/cooperative bank
loans. Loans may be granted by RBs/
3311.2 - 2311.4
02.12.31
2311.4 - X312
02.12.31
X312 - X315
04.12.31
X315 - X319.6
03.12.31
C. UNSECURED LOANS
Sec. X319 Requirement for Grant of Loans
and Other Credit Accommodations. The
following regulations shall govern loans and
other credit accommodations, except those
granted to microfinance and small and
medium enterprises.
X319.1 General guidelines. Before
granting a loan or other credit
accommodation, a bank must ascertain that
the borrowers, co-makers, endorsers, sureties
and/or guarantors are financially capable of
fulfilling their commitments to the bank. For
this purpose, banks shall obtain adequate
information on their credit standings and
financial capacities.
X320 - X320.2
04.12.31
X320.2 - X320.4
04.12.31
X320.4 - X320.8
04.12.31
X320.8 - X320.13
04.12.31
X320.13 - X322
04.12.31
D. RESTRUCTURED LOANS
Sec. X322 Restructured Loans; General
Policy. Banks shall have full discretion in
the restructuring of loans in order to provide
flexibility in arranging the repayment of such
loans without impairing or endangering the
lending banks financial interest, except in
special cases approved by the Monetary
Board such as loans funded by foreign
currency obligations. However, the
restructuring of loans granted to DOSRI should
be upon terms not less favorable to the bank
than those offered to others. While
X322 - X322.2
04.12.31
X322.2
04.12.31
X322.2 - X326.1
04.12.31
X322.3
Restructured loans
considered past due. Restructured loans shall
be considered past due in case of default of
any principal or interest and shall be subject
to classification in accordance with Sec.
X322.4.
X322.4 Classification. The classification of a loan prior to restructuring, e.g. ,
Loans Especially Mentioned, Substandard or Doubtful shall be retained:
Provided, That a loan that is not classified
but which is non-performing prior to
restructuring shall be classified, at least,
Loans Especially Mentioned: Provided,
further, That restructured loans with
capitalized interest shall be classified, at least,
Substandard and the required valuation
reserves shall be set up accordingly:
Provided, finally, That a more adverse
classification may be given, i.e.,
"Substandard", "Doubtful" or "Loss", if the
circumstances warrant it as provided under
Appendix 18.
The upgrading of loan classification, e.g.,
from "Substandard" to "Loans Especially
Mentioned", if circumstances warrant an
upgrading in accordance with the criteria
under Appendix 18, shall only be effective
after a satisfactory track record of payments
of the required amortizations of principal
and/or interest has been established.
X326.1
04.12.31
X326.1 - X327
04.12.31
X327 - X328.1
04.12.31
X328.1 - X330.1
04.12.31
X330.1 - X333
04.12.31
X334 - X336
04.12.31
X336 - X338.1
04.12.31
X338.1 - 1338.2
04.12.31
1338.2 - X339
04.12.31
X339 - X341.1
04.12.31
F. MANDATORY CREDITS
Sec. X341 Agrarian Reform and Agricultural
Credit. Pursuant to P.D. No. 717, the
following guidelines shall govern the grant
of agrarian reform credit and agricultural
credit by banks, government or private.
X341.1 Definition of terms. For
purposes of this Section, the following
definitions shall apply:
a. Loanable funds shall refer to total
funds generated after the effectivity of P.D.
No. 717, the computation of which is
described in Subsec. X341.4.
b. Agrarian reform credit shall refer to
production and other types of loans granted
to beneficiaries of agrarian reform for the
following purposes: acquisition of work
animals, farm equipment and machinery,
seeds, fertilizers, poultry, livestock, feeds and
other similar items; acquisition of lands
authorized under existing laws; construction
and/or acquisition of facilities for production,
processing, storage and marketing; and
efficient and effective merchandising of
agricultural commodities stored and/or
processed by the facilities aforecited in
domestic and foreign commerce.
c. Agricultural credit in general shall
include all loans and/or advances granted to
borrowers, whether beneficiaries of agrarian
reform or not, to finance activities relating to
agriculture, and for processing, marketing,
storage, and distribution of products resulting
from these activities.
d. Agrarian reform beneficiaries shall
include tillers, tenant-farmers, settlers,
agricultural lessees, amortizing owners,
owner-cultivators, farmers cooperatives and
compact farms, as determined by the DAR.
X341.1 - X341.3
04.12.31
X341.3 - X341.4
04.12.31
X341.4 - X341.5
02.12.31
X341.5
02.12.31
X341.5
02.12.31
X341.5 - X341.9
04.12.31
X341.9 - X341.12
03.12.31
X341.12 - X342.1
00.12.31
X342.1 - X342.2
03.12.31
X342.2 - X342.4
03.12.31
X342.5 - X342.15
03.12.31
(b) TBs
(c) RBs/Coop Banks
X343 - X344.2
03.12.31
X344.2 - X347.1
99.12.31
X347.1 - X348.2
04.12.31
(3) Beneficiary;
(4) Security and value of security;
(5) Expiry date of the letter of credit;
and
(6) Certification as to the correctness of
the report by an authorized officer
of the bank.
Sec. X348 Committed Credit Line for
Commercial Paper Issues. The following
guidelines shall govern committed credit
line agreements as a prerequisite for
corporations proposing to issue commercial
paper, pursuant to the New Rules on the
Registration of Short-Term Commercial
Papers (Appendix 14).
X348.1 Who may grant line facility
A bank with a net worth of at least P1 billion
as defined in Sec. X106, may provide a
committed credit line facility to a
commercial paper issuer.
The bank shall exercise proper caution
in ascertaining that the party, in whose favor
the credit line shall be granted, is capable
of fulfilling his commitments to the bank
under the credit line agreement.
A bank or a group of banks may enter
into a committed credit line agreement with
any corporation proposing to issue
commercial paper. Where a group of banks
is involved, a lead bank shall be designated
from among themselves.
X348.2 Ceilings. The aggregate
commitments under committed credit line
agreements entered into by each bank
pursuant to this Section shall not exceed an
amount equivalent to thirty percent (30%)
of its net worth, reckoned as of the date
of execution of the latest agreement:
Provided, That in no case shall a bank extend
X348.2 - X349
02.12.31
X349.1 - X361.1
03.12.31
X361.1 - X361.5
03.12.31
X361.5 - X365.5
03.12.31
X365.5 - X376.1
03.12.31
X376.1 - X376.5
03.12.31
X376.5 - X378
02.12.31
UB
Publiclylisted
KB
Not
listed
Publiclylisted
100%
49%
100
49
100
100
NA
100%
100
Not
listed
Financial Allied
Undertaking
UBs
KBs
TBs
RBs
Coop Banks
Insurance
Companies
VCCs
Others
100
60
100
49%
49
100
100
NA
NA
60
49
X378 - X379.1
02.12.31
TB
RB
Coop Bank
49%
49
49
49
NA
NA
49%
49
49
49
NA
NA
49%
49
49
100
30
49
60
40
49
40
49
40
Financial Allied
Undertaking
UBs
KBs
TBs
RBs
Coop Banks
Insurance
Companies
VCCs
Others
X379.2 - X380
02.12.31
X380 - 1381.2
04.12.31
1381.2 - X382.2
04.12.31
X382.2 - X382.8
04.12.31
X382.8 - X385
03.12.31
LIMIT:
UB
KB
50%
35%
TB
25%
RB
Bank
25%
25%
X385 - X388.5
03.12.31
I. (RESERVED)
Secs. X386 - X387 (Reserved)
J . OTHER OPERATIONS
Sec. X388 Purchase of Receivables and
Other Obligations. The following regulations
shall govern the purchase of receivables and
other obligations.
X388.1 Yield on purchase of
receivables. The rate of yield, including
commissions, premiums, fees and other
charges, from the purchase of receivables and
other obligations, regardless of maturity, that
may be charged or received by banks shall
not be subject to any regulatory ceiling.
X388.2 Purchase of receivables on a
"without recourse" basis. The total exposure
of a bank to a maker of promissory notes
resulting from the purchase of receivables on
a without recourse basis shall be subject to
the SBL of the bank: Provided, That the bank
shall evaluate the credit worthiness of the
maker of such promissory notes.
X388.3 Purchase of commercial
paper. Before purchasing registered
commercial paper, banks authorized to
engage in quasi-banking functions shall -
X388.5 - X393.4
03.12.31
X393.5 - X394.2
03.12.31
X394.2 - X395
03.12.31
X395 - X399
03.12.31
X401 - X402
01.12.31
PART FOUR
TRUST, OTHER FIDUCIARY BUSINESS AND INVESTMENT
MANAGEMENT ACTIVITIES
Part IV - Page 1
X403
01.12.31
Part IV - Page 2
X403
01.12.31
Part IV - Page 2a
X403 - X404.2
02.12.31
Part IV - Page 3
X404.2 - X404.3
02.12.31
Part IV - Page 4
X404.3 - X405.2
02.12.31
Part IV - Page 5
X405.2 - X405.4
04.12.31
Part IV - Page 6
X405.4 - X405.5
04.12.31
UBs/KBs
6%1
TBs
5%2
RBs
4%
In addition to the regular reserve
requirement, the liquidity reserves against
peso-denominated CTFs and such other peso
funds which partake the nature of collective
investment of peso-denominated CTFs shall
be as follows:
UBs/KBs
10%1
TBs
4%2
The liquidity reserves may be held in the
form of:
(i) Short-term market-yielding government securities purchased directly from the
BSP-Treasury Department.
(ii) NDC Agri-Agra ERAP Bonds which
are not being used as alternative compliance
with P.D. No. 717. The requirement that
the securities used shall have a term of not
more than one (1) year shall not apply.
(iii) Poverty Eradication and Alleviation
Certificates (PEACe) bonds only to the extent
of the original gross issue proceeds
determined at the time of the auction, plus
capitalized interest on the underlying zerocoupon Treasury Notes as and when the
corresponding interest is earned over the life
of the bonds.
The reserves on peso-denominated CTFs
and such other managed peso funds shall be
provided out of such funds.
b. Reserves against Trust and Other
Fiduciary Accounts (TOFA) - Others. In
addition to the basic security deposit, banks
shall maintain reserves on TOFA-Others,
except accounts held under (1) Administratorship; (2) Bond Issues/Other
Obligations Under Deed of Trust or
Mortgage; (3) Custodianship and Safekeeping; (4) Depository and Reorganization;
(5) Employee Benefit Plans Under Trust; (6)
Escrow; (7) Personal Trust (testamentary or
living trust); (8) Executorship; (9)
Under MAB dated 12.29.04, regular reserve and liquidity reserve rates shall be 9% and 10%, respectively, effective the
reserve week starting 07 January 2005.
2
Under MAB dated 12.29.04, regular reserve and liquidity reserve rates shall be 6% and 2%, respectively, effective the
reserve week starting 07 January 2005.
1
Part IV - Page 6a
X405.5 - X405.7
04.12.31
Part IV - Page 6b
X405.7
04.12.31
reserves on the value per books of its pesodenominated CTFs and such other managed
peso funds, as well as on TOFA-Others, based
on the seven-day week, starting Friday and
ending Thursday including Saturdays,
Sundays, holidays, non-banking days or days
when there is no clearing: Provided, That
with reference to holidays, non-banking days
and days where there is no clearing, the
reserve position at the close of banking day
immediately preceding such holidays, non-
Part IV - Page 6c
X405.8 - X406.1
96.12.31
X405.8
Reserve deficiencies;
Sanctions. The provisions of Sec. X257 shall
govern the computation of reserve
deficiencies for peso-denominated CTFs and
such other managed peso funds, as well as
TOFA-Others, of banks authorized to engage
in trust and other fiduciary business,
including the sanctions provided in said
Section.
X405.9 Report of compliance. Every
bank shall submit a report to the BSP of its
daily required and available reserves on pesodenominated CTFs and such other managed
peso funds, as well as TOFA-Others, in such
frequency and within the deadline stated in
Appendix 6.
Sec. X406 Organization and Management
X406.1 Organization. A bank
authorized to engage in trust and other
fiduciary business shall, pursuant to Subsec.
X404.1, include in its by-laws, provisions on
the organization plan or structure of the
department, office or unit which shall
conduct such business. The by-laws shall
also include provisions on the creation of a
trust committee, the appointment of a trust
officer and other subordinate officers and a
clear definition of their duties and
responsibilities as well as their line and staff
functional relationships within the
organization which shall be in accordance
with the following guidelines.
a. Trust and other fiduciary business of a
bank shall be carried out through a trust
department which shall be organizationally,
operationally, administratively and
functionally separate and distinct from the
other departments and/or businesses of the
institution.
A bank which is also engaged in
investment management activities, shall
conduct the same only through its trust
department and the responsibilities of the
Part IV - Page 7
X406.1 - X406.4
96.12.31
Part IV - Page 8
X406.4
96.12.31
Part IV - Page 9
X406.4 - X407
96.12.31
Part IV - Page 10
X407 - X408.9
02.12.31
Part IV - Page 11
X408.9 - X409.1
02.12.31
Part IV - Page 12
X409.2 - X409.3
02.12.31
X409.3 - X409.8
00.12.31
Part IV - Page 13
X409.8 - X409.16
04.12.31
Part IV - Page 14
X409.16
04.12.31
Part IV - Page 15
X409.16 - X410.5
04.12.31
The regulations on common trust funds (CTFs) were relocated to Appendix 60. UIT Funds regulations took effect on 01
October 2004 (effectivity of Circular 447 dated 03 September 2004).
1
Part IV - Page 16
X410.5 - X410.6
04.12.31
Part IV - Page 17
X410.6 - X410.7
04.12.31
Part IV - Page 18
X410.7 - X410.9
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X410.9 - X410.12
04.12.31
X410.12 - X411.1
04.12.31
X411.1 - X411.5
04.12.31
X411.5 - X411.8
00.12.31
Part IV - Page 19
X411.9 - X412.1
00.12.31
Part IV - Page 20
X412.2 - X413
00.12.31
Part IV - Page 21
X413 - X414.1
00.12.31
Part IV - Page 22
X414.2 - X415.4
01.12.31
Part IV - Page 23
X415.4 - X421
01.12.31
Part IV - Page 24
X421 - X424
04.12.31
Part IV - Page 25
X424 - X425.3
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Part IV - Page 26
X425.3 - X426.1
03.12.31
X426.1 - X428
00.12.31
Part IV - Page 27
X428 - X441.4
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Part IV - Page 28
X441.5
04.12.31
Part IV - Page 29
X441.5 - X441.8
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Part IV - Page 30
X441.8 - X441.10
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Part IV - Page 31
X441.10 - X441.29
04.12.31
Part IV - Page 32
X441.29 - X499
04.12.31
a. First offense
(1) Fine of up to P10,000 a day for the
institution for each violation reckoned from
the date the violation was committed up to
the date it was corrected; and
(2) Reprimand for the directors/officers
responsible for the violation.
b. Second offense (1) Fine of up to P20,000 a day for the
institution for each violation reckoned from
the date the violation was committed up to
the date it was corrected; and
(2) Suspension for ninety (90) days
without pay of directors/officers responsible
for the violation.
c. Subsequent offenses
(1) Fine of up to P30,000 a day for the
institution for each violation from the date
the violation was committed up to the date
it was corrected;
Part IV - Page 33
X501 - X501.2
04.12.31
PART FIVE
FOREIGN CURRENCY DEPOSIT SYSTEM AND
OTHER OPERATIONS IN FOREIGN CURRENCY
Section X501 Foreign Currency Deposit
System. The foreign currency deposit
operations of banks under R.A. No. 6426, as
amended, shall be governed by the following
rules and regulations.
X501.1 Definition of terms. The
following terms and phrases shall mean as
follows:
a. Foreign Currency Deposit Unit
(FCDU) and Expanded Foreign Currency
Deposit Unit (EFCDU) shall refer to a unit of
a local bank or of a local branch of a foreign
bank authorized by the BSP to engage in
foreign currency-denominated transactions,
pursuant to the provisions of R.A. No. 6426,
as amended.
b. Local bank shall refer to a KB, UB
or TB organized under the laws of the
Republic of the Philippines.
c. Local branch of a foreign bank shall
refer to a branch of a foreign bank doing
business in the Philippines.
d. Short-term loans and securities shall
refer to those with maturities of one (1) year
or less.
e. Medium-term loans and securities
shall refer to those with maturities of more
than one (1) year but not more than five (5)
years.
f. Long-term loans and securities shall
refer to those with maturities of more than
five (5) years.
X501.2 Qualification requirements
a. KBs/UBs may be authorized to
operate an FCDU or EFCDU: Provided, That
they meet the minimum capital requirements
Part V - Page 1
X501.2 - X501.3
04.12.31
be evenly distributed over the capital buildup program period. Banks which failed to
comply with the required capitalization upon
expiration of said two (2)-year period given
them or those which failed to comply with
approved capital build-up program shall
liquidate their FCDU business within one (1)
year and shall surrender to the BSP their
corresponding FCDU licenses. The license
of TBs already authorized to operate FCDU
but not yet operating the same shall be
automatically revoked if they do not comply
with the above minimum capital
requirements as of 7 May 2002.
In addition, the standard pre-qualification
requirements prescribed under Appendix 5
shall be complied with by a bank applying
for an FCDU/EFCDU license.
X501.3 Authorized transactions
a. Banks which are granted a certificate
of authority to operate an FCDU are
authorized to engage in the following
transactions in any acceptable foreign
currency:
(1) Accept deposits and trust accounts
from residents and non-residents;
(2) Deposit, on short-term maturity, with
foreign banks abroad, offshore banking units
(OBUs) and other FCDUs/EFCDUs;
(3) Invest in foreign currencydenominated debt instruments, which are of
short-term maturity and are readily
marketable;
(4) Grant short-term foreign currency
loans as may be allowed by BSP regulations;
(5) Borrow, on short-term maturity, from
other FCDUs/EFCDUs and from foreign
banks abroad and OBUs, subject to existing
rules on foreign borrowings;
(6) Engage in foreign currency-foreign
currency swap with the BSP, OBUs and
other FCDUs/EFCDUs;
Part V - Page 2
X501.3
04.12.31
1
i.e., Customers Liability on Import Bills-Foreign, Customers Liability under Trust Receipts-Foreign, Customers Liability for this
Banks Acceptances Outstanding-Foreign, Export Bills Purchased and Foreign Bills Purchased-Documentary, excluding past due
accounts and Items in Litigation.
Part V - Page 3
X501.3 - X501.4
04.12.31
Part V - Page 4
X501.4 - X501.8
04.12.31
Part V - Page 5
X501.9 - X501.18
04.12.31
Part V - Page 6
X501.18 - X502.2
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Part V - Page 7
X503 - X531
04.12.31
Part V - Page 8
X531 - X532
04.12.31
Highest
Rating
Moodys
Aa3
Standard and Poorss AA
Fitch IBCA
AA
Others as may be
approved by the
Monetary Board
f. The lender shall do daily mark-tomarket on the loaned securities and on the
securities where cash collateral is invested/
reinvested;
g. The lender shall require from the
lending agent/intermediary timely and
comprehensive reports on the lending
activity;
h. For proper identification and
monitoring, the outstanding book balance on
the loaned securities shall be reclassified to
Government Securities Lent under Securities
Lending Agreements;
i. The bank has in place a risk
management system commensurate to the
nature, volume and complexity of its
operations and characterized by clear
delineation of responsibility for risk
management, adequate risk measurement
systems, appropriately structured risk limits,
effective internal controls and complete,
timely and efficient risk reporting system:
Provided, That this requirement shall be
automatically considered complied with by
banks with derivatives license; and
j. The banks CAMELS composite rating
in the last BSP regular examination is at least
3, with a minimum score of 3 on
management.
Sec. X532 Repurchase Agreements
Involving Foreign Currency-Denominated
Government Securities. Banks may engage
in repurchase agreements involving foreign
currency-denominated
government
securities, subject to the following
conditions:
a. Such repurchase agreements shall be
limited to:
(1) Trading Account Securities (TAS)
held under the FCDU/EFCDU books. The
government securities subject of repurchase
agreements are to be booked under the
account Government Securities Sold under
Repurchase Agreements-FCDU/EFCDU.
Part V - Page 9
X532 - X565
04.12.31
Part V - Page 10
X565
04.12.31
Part V - Page 11
X565 - X599
04.12.31
Part V - Page 12
X601 - X601.1
03.12.31
PART SIX
MISCELLANEOUS
A. OTHER OPERATIONS
Section X601 Open Market Operations
The following rules and regulations shall
govern the buying and selling of government
securities in the open market, pursuant to
Section 91 of R.A. No. 7653.
a. The BSP may buy and sell in the open
market for its own account:
(1) Evidences of indebtedness issued
directly by the Government of the Philippines
or its political subdivisions; and
(2) Evidences of indebtedness issued by
government instrumentalities and fully
guaranteed by the Government.
The above evidences of indebtedness
must be freely negotiable and regularly
serviced. Purchases and sales in the open
market shall be made through banks, NBQBs
and accredited government securities
dealers.
b. Outright purchases and sales of
government securities shall be effected at
prevailing market prices.
c. Repurchase (R/P) agreements shall
be open to banks (except RBs), NBQBs, and
accredited government securities dealers and
shall be made under the terms provided for
in Subsec. X601.1 and the following:
(1) The R/P agreement may be paid at
any time before maturity, subject to mutual
agreement of both parties;
(2) In the event the securities covered by
the R/P agreement are not repurchased by
the issuer of such agreement, the same may
be sold in the open market or transferred to
the BSP portfolio; and
(3) Should an issuer of an R/P agreement
become no longer qualified as such, its
outstanding repurchase agreement shall
immediately become due and payable. If
Part VI - Page 1
X601.1 - X602.1
01.12.31
Part VI - Page 2
X602.1
01.12.31
Part VI - Page 3
X602.1
01.12.31
(i) Capable of measuring and aggregating risks across trading and non-trading
activities;
(ii) Approved by the FIs board of
directors;
(iii) Consistent with board-approved risk
appetite;
(iv) Consistent with the level and
complexity of the institutions trading
activities; and
(v) Fully documented and independently validated.
(d) The ability to monitor counterparty
risks on outstanding contracts through a
methodology that reflects changes in credit
exposure as market rates change;
(e) The technical competence of key
officers/traders responsible for the
derivatives products; and
(f) The procedures for evaluating client
suitability.
(3) Other requirements. BSP shall
evaluate banks and other BSP-supervised FIs
financial soundness and track record of
compliance with major prudential
requirements, such as, but not limited to:
(a) CAMELS composite rating of at least
3 in the last regular examination;
(b) Minimum applicable capital
adequacy ratio;
(c) Minimum reserves against deposit
liabilities, deposit substitutes, CTFs, and
TOFA-Others;
(d) FCDU/EFCDU foreign currency asset
cover on FCDU/EFCDU foreign currency
liabilities; and
(e) Maximum allowable open foreign
exchange position.
c. No license derivatives
(1) Scope. A UB/KB with no derivatives
license may trade, sell, deal and take
positions for their own account or in behalf
of customers in currency swaps and
forwards with tenor of one (1) year or less.
The bank may also sell other derivatives
products of licensed entities to its
Part VI - Page 4
X602.1 - X602.3
02.12.31
Part VI - Page 4a
X602.4 - X602.15
03.12.31
Part VI - Page 4b
X602.15 - X602.17
03.12.31
Part VI - Page 4c
X602.17 - X602.26
03.12.31
Part VI - Page 4d
X602.26 - 1602
03.12.31
a. Monetary Penalties
Per Calendar Month
Daily Penalty
1st banking day
P10,000
2nd banking day
20,000
3rd banking day of violation, 30,000
and onwards, or if the excess
FX position of the bank is
thirty percent (30%) or more
of the allowable
limits in any banking day,
regardless of whether a bank
is in the first, second, third or
more days of violation
Abusive
violation
Part VI - Page 4e
1602 - X604.3
03.12.31
Part VI - Page 4f
X604.3 - X604.4
03.12.31
Part VI - Page 4g
X604.4
03.12.31
Part VI - Page 4h
X604.4 - X604.8
96.12.31
P60 plus
1/30 of 1%
on the
amount of
delayed
remittance
P 90 plus
1/15 of 1%
on the
amount of
delayed
remittance
P120 plus
1/10 of 1%
on the
amount of
delayed
remittance
Provided, That:
(1) Fines imposed above shall not be in
excess of P30,000 a day;
(2) The default shall start to run on the
day following the last day required for
submission of the report or remittance, as the
case may be. However, should the last day
of filing fall on a non-banking day in the
locality where the reporting bank is situated,
the default shall start on the day following
the next banking day; and
Part VI - Page 5
X604.8 - X605.1
96.12.31
Part VI - Page 6
X605.1 - X606.2
01.12.31
B. SUNDRY PROVISIONS
Part VI - Page 7
X606.2 - X606.4
01.12.31
Part VI - Page 8
X606.5 - X607
03.12.31
Part VI - Page 8a
X607 - X608.1
03.12.31
Part VI - Page 9
X608.1 - X609.3
03.12.31
Part VI - Page 10
X610 - X610.1
02.12.31
X610.1 - X610.3
98.12.31
Part VI - Page 11
X610.3 - X610.5
98.12.31
Part VI - Page 12
X610.5 - X610.6
98.12.31
Part VI - Page 13
X610.6 - X621.1
03.12.31
Part VI - Page 14
X621.1 Application
Banks wishing to provide and/or enhance
existing electronic banking services shall
submit to the BSP an application describing
the services to be offered/enhanced and how
it fits the banks overall strategy. This shall
be accompanied by a certification signed by
its president or any officer of equivalent rank
and function to the effect that the bank has
complied with the following minimum preconditions:
a. An adequate risk management
process is in place to assess, control, monitor
and respond to potential risks arising from
the proposed electronic banking activities;
b. A manual on corporate security
policy and procedures exists that shall
address all security issues affecting its
electronic banking system, particularly the
following:
(1) Authentication establishes the
identity of both the sender and the receiver;
uses trusted third parties that verify identities
in cyberspace;
(2) Non-repudiation ensures that
transactions can not be repudiated or
presents undeniable proof of participation by
both the sender and the receiver in a
transaction;
(3) Authorization establishes and
enforces the access rights of entities (both
persons and/or devices) to specified
computing resources and application
functions; also locks out unauthorized entities
from physical and logical access to the
secured systems;
(4) Integrity assures that data have not
been altered; and
(5) Confidentiality assures that no one
except the sender and the receiver of the data
can actually understand the data.
c. The system had been tested prior to
its implementation and that the test results
X621.1 - X621.4
03.12.31
X621.4 - X621.6
03.12.31
X621.7 - 1631
03.12.31
Amount
a one time
penalty of
P200,000
1631 - 1631.4
03.12.31
1631.4 - 1631.6
03.12.31
Print Size*
12
24
36
1631.6 - 1633
04.12.31
1633
04.12.31
1633
04.12.31
1633 - X651.1
04.12.31
X651.1
04.12.31
X651.1 - X651.4
98.12.31
Part VI - Page 15
X651.4 - X651.7
98.12.31
Part VI - Page 16
X651.8 - X651.12
98.12.31
Part VI - Page 17
X651.12 - X651.15
98.12.31
Part VI - Page 18
X651.15 - X651.19
03.12.31
Part VI - Page 19
X651.19 - X654.2
03.12.31
Part VI - Page 20
a. Organizational structure
(1) A domestic CRA must be a duly
registered company under the Securities and
Exchange Commission (SEC); and
(2) A domestic CRA must have at least
five (5) years track record in the issuance of
reliable and credible ratings. In the case of
new entrants, a probationary status may be
granted: Provided, That the CRA employs
professional analytical staff with experience
in the credit rating business.
b. Resources
(1) Human Resources
(a) The size and quality of the CRAs
professional analytical staff must have the
capability to thoroughly and competently
evaluate the assessed/rated entitys
creditworthiness;
(b) The size of the CRAs professional
analytical staff must be sufficient to allow
substantial on-going contact with senior
management and operational levels of
assessed/rated entities as a routine
component of the surveillance process;
(c) The CRA shall establish a Rating
Committee composed of adequately
qualified and knowledgeable individuals in
the rating business, majority of whom must
have at least five (5) years experience in credit
rating business;
(d) The directors of the CRA must possess
a high degree of competency equipped with
the appropriate education and relevant
experience in the rating business;
(e) The directors, officers, members of
the rating committee and professional
analytical staff of the CRA have not at any
time been convicted of any offense involving
moral turpitude or violation of the Securities
Regulation Code; and
(f) The directors, officers, members of
the rating committee and professional
analytical staff of the CRA are not currently
involved as a defendant in any litigation
connected with violations of the Securities
X654.2
03.12.31
Part VI - Page 21
X654.2 - X654.3
03.12.31
Part VI - Page 22
X654.4 - X658
04.12.31
Part VI - Page 23
X658 - X699
04.12.31
Part VI - Page 24
APP. 1
01.12.31
B.
Financial Resources, Past Performance and General Compliance with Banking Laws
and Regulations
1.
Applicant bank shall not have incurred any deficiency in the minimum capital
to risk assets ratio prescribed by the Monetary Board pursuant to
Section 34 of R.A. No. 8791 for the year preceding the filing of application. It
shall have sufficient valuation reserves to cover estimated losses.
2.
Applicant bank shall not have incurred net deficiencies in its reserves against
deposit and deposit substitute liabilities for the three (3)-month period
immediately preceding the filing of application. In addition, applicant banks
liquidity ratios such as primary reserves to deposit liabilities and primary and
secondary reserves to deposit and demand liabilities shall at least be equal to
the averages of the UB sector as of the end of the quarter immediately preceding
the date of application.
3.
Applicant bank shall show profitable operations for the past calendar year
immediately preceding the filing of application. Its ratio of net earnings to
average capital accounts should indicate satisfactory returns on stockholders
investments.
4.
Appendix 1 - Page 1
APP. 1
01.12.31
C.
The applicant bank shall manifest adequate banking facilities and managerial
capability in commercial banking operations as shown by, among other things,
its branch network, subsidiaries and allied undertakings, FCDU/EFCDU and
foreign trade transactions, participation in syndicated lending, trust services,
etc.
2.
The applicant bank shall indicate in the application those officers and key
personnel having the appropriate training and/or experience in investment
banking and related functions are available/obtainable by the bank.
2.
A list of direct and indirect loans to DOSRI which are unsecured, indicating
the original amount, date granted, outstanding balance and classification (i.e.,
whether current or past due) of each DOSRI loan.
3.
4.
5.
Appendix 1 - Page 2
APP. 1
01.12.31
B.
C.
The names of the members of the board of directors and principal officers of
the applicant bank.
2.
The proposed organization chart of the department within the applicant bank
that will be responsible for the investment banking functions, indicating the
designation of officers and other key positions and the names of persons
proposed for appointment to those positions.
D.
E.
Corporate Strategy
1.
The statement of corporate strategy of the proposed UB, its immediate and
long-term goals and objectives.
2.
The lending program and special policies lined up for the first five (5) years
including details on guidelines and standards to be established on exposure
limits, portfolio diversification, collateral requirements, geographical expansion,
assistance to pioneer and priority areas of economic activities and relationship
with clients.
3.
The investment policies and programs to be implemented within the first five
(5) years of operation including broad categories of undertakings in which the
proposed UB will invest, the portfolio mix to be observed, the extent of control
over subscribed capital stock and voting stock to be exercised in the financial
allied undertakings, quasi-banks and non-financial allied undertakings.
4.
The fund generation program for the first five (5) years of operation to support
the expansion in loans and investments.
5.
The quarterly underwriting program for one (1) year stating industry of issuer,
the volume of underwriting business classified into equity and debt, public
offering and private placement and other information.
Financial Projections
1.
Appendix 1 - Page 3
APP. 1
01.12.31
2.
The detailed projected statement of income and expenses for the first five (5)
years of operation.
3.
The projected operating ratios for the first five (5) years of operation.
4.
5.
The projected balance sheet ratios as of the first five (5) years-end of operation.
6.
The projected funds flow for the first five (5) years of operation.
The shares to be publicly offered may be voting or non-voting shares and may
come from the banks existing authorized and unsubscribed stock or from an
increase in its authorized capital stock: Provided, That in the case of an applicant
bank whose authorized capital has been fully subscribed and paid-up and that
bank does not intend to increase its authorized capital stock, the shares to be
publicly offered may come from existing stockholders who may be willing to
divest themselves of such holdings.
2.
The offering bank shall accept offers to buy or invest in its publicly offered
shares of stock from new investors or from existing stockholders whose
stockholdings, together with those of their relatives within the fourth degree of
consanguinity or affinity or of firms, partnerships, corporations or associations,
at least a majority of the voting stock of which are owned by such stockholders,
constitute less than twenty percent (20%) of the banks subscribed capital stock.
The banks articles of incorporation shall have an explicit provision stating that
existing stockholders who are disqualified under these rules shall waive their preemptive rights to the additional shares to be publicly offered unless the articles
of incorporation already provide that such stockholders do not have pre-emptive
rights. The waiver may be limited to three (3) months after which period the
disqualified stockholders may purchase shares from the unsubscribed/unsold
publicly offered shares.
The publicly offered shares of stock shall be sold to at least twenty-one (21)
qualified buyers or group of buyers but the total shares of stock which may be
purchased by any qualified buyer or group of buyers shall not exceed ten
percent (10%) of the publicly offered shares of stock.
Appendix 1 - Page 4
APP. 1
01.12.31
Buyers of publicly offered shares shall in no case exceed the ownership ceilings
under Sections 11, 12, and 13 of R.A. No. 8791 and Section 2 of R.A. No.
7721.
3.
The bank shall fix the price of the shares of stock. In the case of subscribed
and fully paid-up shares which shareholders are willing to divest, the price
shall be set by agreement of the parties.
4.
The offering bank shall submit to the appropriate supervising and examining
department for evaluation, a prospectus containing the following minimum
information:
(a)
(b)
(c)
The current authorized capital stock and the stock offered for
subscription/sale to the public indicating the classes of stock and the
amount for each class presented in tabular form;
(d)
The per share and aggregate offering price of each class of stock
and the per share and aggregate proceeds to be received by
the bank;
(iii)
(iv)
(v)
(e)
(f)
Names and addresses of all directors and principal officers and their
respective designations, and stock options and other similar plans for
directors and officers; and
(g)
Appendix 1 - Page 5
APP. 1
01.12.31
voting or non-voting, and the par value of such shares. The list shall
likewise show the ratio of subscribed capital stock held by directors
and principal officers to the authorized capital stock; the ratio of the
publicly offered shares of stock to the authorized capital stock, the
citizenship and family groupings of stockholders with their
corresponding percentage of ownership.
5.
The bank shall cause the publication of the public offering in a newspaper of
general circulation at least twice within a period of one (1) month prior to the
offering.
6.
The requirements of public offering and listing shall be complied with by all applicant
banks including those that are able to meet the prescribed minimum capital requirement on
their own or through merger/consolidation with other banks or non-bank financial
intermediaries.
Appendix 1 - Page 6
APP. 2
96.12.31
The Governor
Bangko Sentral ng Pilipinas
Manila, Philippines
Sir:
We hereby apply for authority to invest in _______ percent (___%) of the voting stock
of __________________________________, an existing domestic bank in the Philippines.
In support of this application, we submit the following documents:
1.
A copy of the Memorandum of Understanding between the bank and the investee
domestic bank;
2.
A copy of the Board Resolution authorizing the bank to invest in such domestic bank,
and designating the person who will represent the bank in connection therewith;
3.
Appendix 2 - Page 1
APP. 2
96.12.31
4.
5.
6.
7.
Number of stockholders and list of stockholders owning more than fifteen percent
(15%) of the voting stock, if any;
8.
A copy each of the banks audited financial statements (i.e., statement of condition
and statement of income and expenses) for the last two (2) years prior to the filing of
application;
9.
A copy of the banks annual report to the stockholders for the year immediately
preceding the date of filing of application;
10.
11.
If the investment will constitute majority ownership or give the investor bank control
of management, business plan supported by projected financial statements for one (1)
year, and how such business plan can accomplish the policy objectives of R.A. No.
7721; and
12.
Bio-data sheet for each of the new directors and new principal officers;
2.
Evidence of citizenship for each of the new directors and new principal officers in the
investee domestic bank, such as:
(a)
Passport;
(b)
Birth certificate; or
(c)
Naturalization certificate;
3.
National Bureau of Investigation (NBI) and Bureau of Internal Revenue (BIR) clearances
or similar police and tax clearances for each of the new directors and new principal
officers who are Filipino citizens or residents of the Philippines;
Appendix 2 - Page 2
APP. 2
96.12.31
4.
Authorization for the Bangko Sentral ng Pilipinas to conduct investigation and to obtain
information from other sources in order to establish the authenticity of information/
representations submitted; and
5.
Attachments
B. Sample Application for Authority to Establish a Subsidiary in the Philippines
____________________________
Name of Applicant
____________________________
Address of Head Office
____________________________
Cable Address
______________________________
Telex/Fax Number
__________________
Date
The Governor
Bangko Sentral ng Pilipinas
Manila, Philippines
Sir:
We hereby apply for authority to establish a _______ percent ( ___%)-owned
the type of bank) banking subsidiary in the Philippines.
(Specify
A copy of the board resolution authorizing the bank to establish such subsidiary,
and designating the person who will represent the bank in connection therewith;
Appendix 2 - Page 3
APP. 2
96.12.31
2.
3.
A copy each of the banks latest amended articles of incorporation and by-laws;
4.
5.
6.
A certification from the banks Corporate Secretary that the bank or its holding company
has at least fifty (50) stockholders and that no stockholder owns more than fifteen
percent (15%) of the capital stock of the bank or its holding company, or that more
than fifty percent (50%) of the capital stock of said bank or its holding company is
owned by the government;
7.
A certification from the banks home country stock exchange authorized by the
government that the bank is listed therein;
8.
A copy each of the audited financial statements (i.e., statement of condition and
statement of income and expenses) for the last two (2) years prior to the filing of
application of the applicant bank, and other corporate stockholders, if any, in the
proposed subsidiary;
9.
10.
A copy of the banks annual report to the stockholders for the year immediately
preceding the date of filing of application;
11.
Certified photo copies of income tax returns of each of the subscribers/ stockholders
for the last two (2) calendar/fiscal years;
12.
Appendix 2 - Page 4
APP. 2
96.12.31
(b)
(c)
(d)
(e)
That adequate information on the bank and its subsidiaries will be provided to
the Bangko Sentral ng Pilipinas to the extent allowed under existing laws;
That the Philippine banks may likewise be allowed to establish subsidiaries
and/or branches in the banks home country, subject to compliance with the
rules and regulations governing admission which are applicable to all foreign
banks;
As to the ranking of the applicant bank in the home country on the basis of net
worth as well as on the basis of on-book total assets of the head office and all
branches, excluding subsidiaries and affiliates; and
That the bank complies with the capital requirements as prescribed by the
laws and regulations of the home country;
13.
Business plan supported by projected financial statements for one (1) year, and how
such business plan can accomplish the policy objectives of R.A. No. 7721;
14.
National Bureau of Investigation (NBI) and Bureau of Internal Revenue (BIR) clearances
15.
16.
Agreement to Organize a
(specify type of bank)
prescribed format in Item C below); and
17.
Authorization for the Bangko Sentral ng Pilipinas to conduct investigation and to obtain
information from other sources in order to establish the authenticity of information/
representations submitted.
Appendix 2 - Page 5
APP. 2
96.12.31
BANK
An agreement, made this _____ day of _________________, 19__ by and among the
following:
Name
Residence
Citizenship
Whereas, the parties hereto are desirous of forming a corporation under the following
terms:
1. That a corporation to be known as ___________________ shall forthwith be formed
for the purpose of carrying on the business of a __________________ bank as provided for by
law;
2. That the place where the principal office of the corporation is to be established or
located is in _________________________;
3. That the number of directors of the said corporation shall be _________________
and that the names, residences and citizenship of the proposed directors of the corporation
are, as follows:
Name
Residence
Citizenship
Appendix 2 - Page 6
APP. 2
96.12.31
Name
Residence
Citizenship
Amount to be
Subscribed
Paid-In
Total
6. That ______________________, one of the organizers, is hereby authorized to sign
the application to the Bangko Sentral ng Pilipinas for the issuance of the certificate of authority
to establish a ___________________ bank.
IN WITNESS WHEREOF, we have hereunto set our hands this _______ day of
______________, 19___ in the ______________________________, Philippines.
SIGNATURES
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
___________________________________
Witness
NOTARIAL ACKNOWLEDGMENT
Appendix 2 - Page 7
APP. 2
96.12.31
D. Sample Letter to BSP Submitting Banks Articles of Incorporation for Issuance of the
Certificate of Authority for SEC Registration
__________________
Date
The Governor
Bangko Sentral ng Pilipinas
Manila, Philippines
Sir:
I have the honor to submit herewith the Articles of Incorporation of
_______________________________.
By way of supporting documents, I am also submitting the following:
1.
Names of the proposed principal officers with their proposed designations and duties;
2.
Bio-data sheet for each of the incorporators, proposed directors and principal officers;
3.
Evidence that at least 40% of the voting stock of the corporation is owned by citizens
of the Philippines;
4.
Evidence of citizenship for each of the directors and principal officers in the banking
subsidiary, such as:
(a)
Passport;
(b)
Birth certificate; or
(c)
Naturalization certificate;
5.
National Bureau of Investigation (NBI) and Bureau of Internal Revenue (BIR) clearances
or similar police or tax clearance for each of the proposed principal officers who are
Filipino citizens or residents of the Philippines; and
6.
If you find the Articles of Incorporation in order, we are requesting for the issuance of
the necessary certificate of authority for its registration with the Securities and Exchange
Commission.
Very truly yours,
_______________________________
Authorized Representative
of the Organizers
Attachments
Appendix 2 - Page 8
APP. 2
96.12.31
A copy of the board resolution authorizing the bank to establish such branch/es in the
Philippines, and designating the person who will represent the bank in connection
therewith;
2.
3.
4.
5.
Appendix 2 - Page 9
APP. 2
96.12.31
6.
A certification from the banks Corporate Secretary that the bank or its holding company
has at least fifty (50) stockholders and that no stockholder owns more than fifteen percent
(15%) of the capital stock of the bank or its holding company, or that more than fifty
percent (50%) of the capital stock of said bank or its holding company is owned by the
government;
7.
A certification from the banks home country stock exchange authorized by the
government that the bank is listed therein;
8.
A copy each of the banks audited financial statements (i.e., statement of condition and
statement of income and expenses) for the last two (2) years prior to the filing of
application;
9.
A copy of the banks annual report to the stockholders for the year immediately preceding
the date of filing of application;
10.
11.
Business plan supported by projected financial statements for one (1) year, and how
such business plan can accomplish the policy objectives of R.A. No. 7721;
12.
13.
Authorization for the Bangko Sentral ng Pilipinas to conduct investigation and to obtain
information from other sources in order to establish the authenticity of the information/
representations submitted.
Should this application be approved, we undertake to submit another application for the
issuance of the necessary certificate of authority to obtain license from the Securities and
Exchange Commission (SEC) to operate branch/es in the Philippines (See prescribed format in
Item E below).
Very truly yours,
_________________________
Signature of Authorized Officer
Over Printed Name
_________________________
Designation
Attachments
Appendix 2 - Page 10
APP. 2
96.12.31
F. Sample Request for BSP Authority to Obtain License from SEC to Establish Branches of
Foreign Banks
________________
Date
The Governor
Bangko Sentral ng Pilipinas
Manila, Philippines
S I r:
I have the honor to request for a certificate of authority to obtain license from the
Securities and Exchange Commission (SEC) for the establishment of branch/es in the Philippines.
In support of this request, I am pleased to submit the following papers/documents and
other information:
1.
Names of the proposed principal officers with their proposed designation and duties;
2.
3.
Evidence of citizenship for each of the proposed principal officers, such as:
(a)
Passport;
(b)
Birth certificate; or
(c)
Naturalization certificate;
4.
National Bureau of Investigation (NBI) and Bureau of Internal Revenue (BIR) clearances
or similar police or tax clearances for each of the proposed principal officers who are
Filipino citizens or residents of the Philippines;
5.
Appendix 2 - Page 11
APP. 2
96.12.31
Appendix 2 - Page 12
APP. 2
96.12.31
The right on this Guarantee is independent of and separate from whatever right, security
or action which any depositor or creditor of said branch or branches in the Philippines may
have, take or pursue to protect his interest, and whatever action or measure the Bangko Sentral
ng Pilipinas may adopt in the exercise of its supervisory and regulatory powers allowed and
provided for in said Republic Acts No. 337, as amended, and No. 7721 of the Republic of the
Philippines, such as requiring Guarantor to assign to its Philippine Branch or Branches an
amount of capital sufficient to meet the minimum capital required in said Republic Act No.
7721, or any measure it may be authorized to take under the provisions of said Republic Act
No. 337, as amended, in the case of capital deficiencies; in such case or cases, the liability
created hereunder shall not in the least be minimized or affected, it being the purpose of this
undertaking that Guarantor shall at all times be responsible and obligated for any such
obligations or liabilities of its branch or branches in the Philippines, and to the extent that the
same has been fully paid or satisfied only will said Guarantor be relieved from its primary
obligations hereunder.
No technicality in the law or in the language of this Guarantee or in any contract,
agreement or security, held by or with said branch or branches in the Philippines, shall defeat
the nature and purpose of this Guarantee as a primary and direct obligation of Guarantor to
the end that the interest of the depositors and creditors of the said branch or branches in the
Philippines may be fully protected and satisfied in accordance with Section 5 of Republic Act
No. 7721. Guarantor hereby acknowledges having full knowledge of said Republic Act No.
7721 in accordance with which this primary and principal obligation is given.
Guarantor hereby recognizes the jurisdiction of Philippine Courts and hereby authorizes
its branch office and/or offices in the Philippines to accept summons, processes and notices
from the Philippine courts.
The Guarantee shall be governed by Philippine law.
IN WITNESS WHEREOF, this Guarantee has been executed by Guarantor acting by
and through its Officers thereunto duly authorized this _____ day of _____________, 19__.
Appendix 2 - Page 13
APP. 3
96.12.31
A.
Financial Resources, Past Performance and General Compliance with Banking Laws
and Regulations
Applicant bank shall not have incurred deficiency in the required capital-torisk assets ratio (10%) under Section 22 of R.A. No. 337, as amended, and Subsecs.
X121.5 and X121.6, for the year preceding the filing of application. It shall have
sufficient valuation reserves to cover estimated losses.
Appendix 3 - Page 1
APP. 3
96.12.31
Applicant bank shall not have incurred net deficiencies in its reserves against
deposit liabilities and/or deposit substitute liabilities for the three (3)-month period
immediately preceding the filing of the application. In addition, such ratios as primary
reserves to deposit liabilities and primary and secondary reserves to deposit and demand
liabilities shall show that applicant bank is in a liquid position.
Applicant bank has substantially complied with banking laws or orders,
instructions or regulations issued by the Monetary Board or orders, instructions or
rulings by the Governor. Major/important exceptions and findings by BSP examiners
have been corrected or satisfactorily explained.
C.
II.
A.
B.
2.
Bio-data that should be prepared for each of the proposed key personnel in the
investment banking department.
Corporate Strategy
1.
The statement of corporate strategy of EKB and the immediate and long-term
goals and objectives.
2.
The lending program and special policies lined up for the first five (5) years
including details on guidelines and standards to be established on exposure
limits, portfolio diversification, collateral requirements, geographical expansion,
assistance to pioneer and priority areas of economic activities and relationship
with clients.
Appendix 3 - Page 2
APP. 3
96.12.31
C.
3.
Investment policies and program to be implemented within the first five (5)
years of operation including the broad categories of undertakings in which EKB
may invest, the portfolio mix to be observed, the extent of control over subscribed
capital stock and voting stock to be exercised in financial allied undertakings,
quasi-banks and non-financial allied undertakings.
4.
Local branches of foreign banks may invest in the equity of financial as well as
non-financial allied undertakings and non-allied undertakings wherein locally
incorporated commercial banks with EKB authority are allowed to invest.
However, the branches equity investments shall be subject to equity ceilings
set in pertinent laws.
5.
Fund generation program for the first five (5) years of operation to support the
expansion in loans and investments.
6.
Quarterly underwriting program for one (1) year stating industry of issuer, the
volume of underwriting business classified into equity and debt, public offering
and private placement and other information.
Financial Projections
1.
2.
The detailed projected statement of income and expenses for the first five (5)
years of operation.
3.
The projected operating ratios for the first five (5) years of operation.
4.
5.
The projected balance sheet ratios as of the first five (5) years of operation.
6.
The projected funds flow for the first five (5) years of operation.
Appendix 3 - Page 3
APP. 4
02.12.31
AFFIDAVIT
I,_________________________________,
also
known
as
________________________with business address at ______________________, after having
been duly sworn to in accordance with law depose and state that:
1. I am the transferee of (state quantity) shares representing ____ percent of voting
stocks of (state name of bank), hereinafter to be referred to as Bank, by virtue of (state
instrument of transfer) dated _________________.
2. In acquiring equity in the Bank, I acted with full awareness and understanding that
the Bank is a duly organized domestic banking corporation, exercising and enjoying a right,
franchise and privilege to engage in _________ banking business, decreed by law to be a
nationalized industry, wherein at least __________ of the voting stock should be owned by
citizens of the Philippines and that there exist prohibitions under the law against the holding
by a corporation or any person of voting stocks in excess of _______ of the voting stock of the
Bank.
3. Consonant with the policy of the Government as provided for in Commonwealth
Act No. 108, as amended, otherwise known as the Anti-Dummy Law, and Republic Act No.
8791, otherwise known as the General Banking Law of 2000, I hereby declare as follows:
a. The (state instrument of transfer) was not simulated to evade the provisions of the
Constitution and Commonwealth Act. No. 108 or the provisions of Republic Act
No. 8791 particularly Sections 11, 12 and 13 imposing maximum equity holdings
by any natural or juridical persons;
b. That I acquired said shares of stocks for valuable consideration from my own funds;
c. As such transferee, I have title over said shares of stock; and
d. That I undertake to dispose of the shares of stocks I may have acquired in excess of
the prescribed ceilings.
Appendix 4 - Page 1
APP. 4
02.12.31
4. This Affidavit is executed for the purpose of stating under oath my bona fide title
over the shares of voting stocks of the Bank; that in acquiring title over said shares I gave
valuable consideration; and that I shall comply with the requirements of all laws, rules and
regulations with respect to my conduct as stockholder of the Bank.
IN WITNESS WHEREOF, I hereby affix my signature this _____________ day of
__________________, 20___ at _______________.
________________________
Affiant
SUBSCRIBED and sworn to before me this ______ day of _______ 20__, affiant exhibiting
to me his Community Tax Certificate No. _________, issued at ________ on ______________
20__.
Notary Public
Doc. No. ____
Page No. ____
Book No. ____
Series of ____
Appendix 4 - Page 2
APP. 5
98.12.31
Banking Authorities
B. Standard Pre-Qualification
Requirements
To establish branches
To establish offices
abroad;
To accept demand,
NOW, NCTDs and
government deposits;
To engage in quasibanking, EFCDU/
FCDU and derivatives transactions
90 days
60 days
90 days
continuing
Appendix 5 - Page 1
APP. 5
98.12.31
2 quarters
1 quarter
90 days
continuing
12 weeks
8 weeks
b. total investment in real estate and improvements thereon, including bank equipment,
does not exceed fifty percent (50%) of net
worth as of date of application;
6. The banks accounting records, systems, procedures and internal control systems are satisfactorily maintained;
Appendix 5 - Page 2
APP. 5
99.12.31
10. The officers who will be in-charge of the operation relating to the authority applied for have
actual experience of at least two (2) years
in another bank as in-charge (or at least as
assistant-in-charge) of the same operation;
n/a
n/a
n/a
n/a
________________
a - applicable
n/a - not applicable
Appendix 5 - Page 3
A. UBs/KBs
Manual of Regulations for Banks
Category
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
A-1
X162.9
Quarterly
A-1
X162.9
Quarterly
Same as in Form 2B
above
A-2
X116.2
X121.5
X258
Weekly
CC:Mail to SDC
Weekly
Upon completion of
processing by SDC
(Note: CDRC-sourced
reports generated by
SDC are furnished to
the respective operating
divisions of appropriate
BSP SED weekly)
Annexes
APP. 6
04.12.3 1
Appendix 6 - Page 1
CARE Reports
Reports on Required and Available Reserves
on:
- Deposit Substitutes/Interbank Loans; and
- Deposit Liabilities
Reports on Minimum Capital Required Under
Section 34 of R.A. No. 8791
Summary Utilization of Available Reserves;&
Liquidity Floor on Govt. Funds Held
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
A-2
BSP 7-16-01A
X258
As changes
occur
A-2
Unnumbered
X405.9
Weekly
A-2
Unnumbered
(Per CL dated 8-20-98)
X405.9
-do-
-do-
-do-
A-2
BSP-16-35 TR
X162
X425.2
Quarterly
A-2
Unnumbered
(Revised January
2004 per Cir. 417
dated 1.28.04)
X116.4
X116.5
Quarterly
Original copy to
appropriate BSP SED
solo basis
consolidated basis
APP. 6
04.12.31
Appendix 6 - Page 2
Category
Category
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
A-2
Unnumbered
(no prescribed
form)
X141.9
Annually or
as directors
are elected
A-2
X162
Monthly
Submission
Procedure
-
CC:Mail to SDC
APP. 6
04.12.3 1
Appendix 6 - Page 3
Schedules:
1
- Due from Other Banks;
2
- Loan Portfolio and Other
Accommodations (Borrowings of
LGUs) (Amended by CL dated
5.15.02);
2A - Loan Portfolio and Other
Accommodations(Gov't Corporation/ Subsidiaries) (Retitled);
2.1 - Loans Portfolio and Other Credit
Accommodations(Borrowings of
LGUs) - Amended by CL dated
5.15.02;
2.2 - Microfinance Loans (November
2003);
3
- Trading Account Securities Investments, Available for Sale
Securities and Investments in Bonds
and Other Debt Instruments (IBODI)
(Amended by CL dated 5.15.02);
Form No.
MOR Ref.
Report Title
3A
3B
4
4A
5
5A
5B
5C
6
7
7A
8
8a
Frequency
Monthly
Submission
Deadline
15th banking day after end of reference
month
Submission
Procedure
CC: Mail to SDC
APP. 6
04.12.31
Appendix 6 - Page 4
Category
Category
Form No.
MOR Ref.
X501.4
Report Title
9
10
11
12
X240.8
13
X121.6
14
14
14A -
[DCB2A]14S
Submission
Deadline
Submission
Procedure
Monthly
Quarterly
CC:Mail to SDC
-do-
-do-
Quarterly
-do-
APP. 6
04.12.3 1
Appendix 6 - Page 5
A-2
Frequency
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
Schedules:
1 - Housing Loans Extended or
Guaranteed
Under
the
Government's National Shelter
Program (NSP);
2 - Real Estate Loans Considered NonRisk Assets;
3 - Real Estate Loans with Original
Amount of P3.5M and Below to
Finance
Acquisitions
or
Improvement of Residential Units;
4 - Trust Department Clients Directed
IMA Real Estate Loans (Trust Dept.
only)
16
17
Monthly
-do-
-do-
CC:Mail to SDC
-do-
A-2
X162
Monthly
CC:Mail to SDC
A-2
Unnumbered
(Amended by MAB
dated 3.1.02 and CLs
dated 11.12.02 and
2.5.02)
X162
X425.2
Quarterly
CC:Mail to SDC
A-2
Unnumbered
(Amended by MAB
dated 3.1.02)
X162
X425.2
-do-
-do-
-do-
APP. 6
04.12.31
Appendix 6 - Page 6
Category
Category
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
A-2
Unnumbered
(Revised May 2002)
X691.5
As
Transaction
occurs
A-2
Unnumbered
(Revised May 2002)
X691.5
-do-
-do-
-do-
A-2
Unnumbered
(Cir. 279 dtd 4.2.01)
X691.7
Annually
A-3
Quarterly
Original - SDC
Duplicate Appropriate BSP SED
Part IQuarterly;
and Part IISemestrally
X162.6
X162
A-3
BSP-7-16-02-KB-A
X162.11
APP. 6
04.12.3 1
Appendix 6 - Page 7
X162
Schedules:
1
- Loans-to-Deposit Ratio Supplementary Information;
2
- Aging of Loans and Selected
Receivables (Revised September
2003 per MAB dated 12.30.03);
3
- Report on Reconciling Items of More
than Six (6) months in Due From
Head Office/Branches/Agencies
accounts;
4
- Breakdown of Due From/Due to
Local Banks and Domestic Deposit
Liabilities (BSP-7-16-02-KB.1);
5
- Breakdown of Domestic Savings
Deposits (BSP-7-16-02-KB.2)
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
A-3
X162
Quarterly
CC:Mail transmission to
appropriate BSP SED
A-3
X162
Quarterly
Original- - SDC
Duplicate - Appropriate
BSP SED
A-3
X331
X409.3
Weekly
A-3
X330
X409.3
Weekly
A-3
X330
X409.3
Weekly
A-3
X335
X409.3
Semestral
APP. 6
04.12.31
Appendix 6 - Page 8
Category
Category
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
X335
X409.3
Semestral
A-3
X335
As loan to
director or
officer is
approved
A-3
X162.5
As
transaction
is approved
A-3
Unnumbered
X602
Monthly
A-3
Unnumbered
X602
Monthly
A-3
Unnumbered
X602
Monthly
A-3
Unnumbered
X602
Monthly
A-3
X342.6
Quarterly
APP. 6
04.12.3 1
Appendix 6 - Page 9
A-3
A-3
A-3
Form No.
MOR Ref.
X162
X162.12
Report Title
Frequency
Submission
Deadline
Submission
Procedure
Quarterly
Upon transmission/
submission of main
report
Quarterly
Upon transmission/
submission of main
report
Quarterly
Semestral
Quarterly
Semestral
Attachment to Main
Report
Semestral
Attachment to Main
Report
Attachment to Main
Report
Attachment to Main
Report
Semestral
15th banking day after end of reference
quarter
A-3
X162
Quarterly/
Annually
A-3
X162.12
Quarterly/
Annually
APP. 6
04.12.31
Appendix 6 - Page 10
Category
Category
A-3
Form No.
BSP-7-16-27
(Revised December
2004 per MAB dated
9.8.04)
MOR Ref.
X341.8
Report Title
Consolidated Report on the Utilization of
Loanable Funds Generated Which Were Set
Aside for Agrarian Reform/Other Agricultural
Credits with prescribed schedules to wit:
A
Frequency
Quarterly
Submission
Deadline
Submission
Procedure
Upon transmission/
submission of main
report
X162.7
Annually/
quarterly
when any
change
occurs
1162.5
Semestral
APP. 6
04.12.3 1
Appendix 6 - Page 11
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
X339.4
Semestral
Unnumbered
X339.4
As approved/
changes
occur
X136.4
On each
declaration
X156.2
As changes
occur
X144
After
election or
appointment and
as changes
occur
CC:Mail/Diskette: SDC
Appropriate BSP SED
As necessary
Upon transmission of
the template file of
bio-data
Fax to SDC
As necessary
Annually
(CL dated
1.09.01)
Unnumbered
APP. 6
04.12.31
Appendix 6 - Page 12
Category
Category
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
X162.4
Report on Crimes/Losses
(Note: In cases involving bank personnel, the
prescribed submission deadline shall be five
(5) banking days after initiation of judicial or
extra-judicial action or after imposition of
administrative sanction, whichever is earlier.)
As crimes or
incidents
occur
Original - Appropriate
BSP SED
Duplicate - SITD
Unnumbered
(no prescribed
form)
X143.4
As
disqualification
occurs
X306.5c
As write-off
occurs
BSP-7-16-23-KB
Each time a
foreign
equity
investment
is made
BSP-7-16-32 A
X162
(Revised August 2003)
Quarterly
Electronic submission/
diskette - SDC
Unnumbered
X380
After each
investment
Unnumbered
X162.10
Annually
APP. 6
04.12.3 1
Appendix 6 - Page 13
Form No.
Unnumbered
MOR Ref.
X164.6
Report Title
Annual Report of Management to Stockholders
Covering Results of Operations for the Past
Year
Audit Engagement Contract
Unnumbered
(no prescribed
form)
Frequency
Submission
Deadline
Submission
Procedure
Annually
As contract
is signed
Unnumbered
X164
Annually
Unnumbered
X426.2
Annually
Unnumbered
X162.12
Annually
Unnumbered
X162.12
As
examination
occurs
APP. 6
04.12.31
Appendix 6 - Page 14
Category
Category
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
Unnumbered
X162.6
Annually
Unnumbered
X162.3
As changes
occur
Unnumbered
X162.1
As
designation
by Banks
board of
directors
occurs
Unnumbered
X343
As
transaction
occurs
To be submitted only
when there are transactions covered, by
noon of banking day
immediately
following date of
transaction
Unnumbered
X162
As incident
occurs
To be submitted not
later than five (5)
banking days from
end of reference
quarter
Unnumbered
X165.6
Annually
To be submitted not
later than five (5)
banking days from
end of reference
year
Unnumbered
X342.2c
Monthly
APP. 6
04.12.3 1
Appendix 6 - Page 15
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
Unnumbered
X233.9
Monthly
Original - Appropriate
BSP SED
Unnumbered
X262.3
Semestral
Unnumbered
X162.2
Weekly
Unnumbered
Weekly
Unnumbered
(Revised January
2003 per Cir. 366
dated 1.21.03)
X501.3
Monthly
Unnumbered
X565
Monthly
X409.16
As
transaction
occurs
Weekly
DER Reports:
B
RS Form 1A
(BSP 5-17-30)
1162.13
______________________________________
* A report is not required if no transfers were effected during the month.
Original - DER
APP. 6
04.12.31
Appendix 6 - Page 16
Category
Category
Form No.
MOR Ref.
RS Form 1A
(BSP 5-17-33)
1162.13
Report Title
Frequency
Submission
Deadline
Submission
Procedure
Monthly
Original - DER
RS Form 1B
(BSP 5-17-30)
Monthly
Original - DER
RS Form 1B
(BSP 5-17-27)
Daily
Original -DER
RS Form 2A
(BSP- 5-17-33)
1162.13
Weekly
Original - DER
BSP-5-17-35.A
1162.13
Monthly
Original - DER
RS Form 2C
(BSP 5-17-36)
Weekly
Original - DER
RS Form 2D
(CBP 5-17-34A)
Daily
Original - DER
RS Form 2E
Daily
Original - DER
APP. 6
04.12.3 1
Appendix 6 - Page 17
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
CBP 5-17-01
Quarterly
Combined
BSP 5-17-02 and
BSP 5-17-31
Monthly
As
transaction
occurs
DER
Weekly
CC:Mail to Appropriate
BSP SED/IOD and DER
and hard copy to IOD
Daily
-do-
-do-
Weekly
-do-
3
4
5
-do-do-do-
-do-do-do-
-do-do-do-
Unnumbered
X425.3
Original - DER
In Diskette-format to
DER
RBU/FCDU Reports:
A-3
APP. 6
04.12.31
Appendix 6 - Page 18
Category
Category
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
Investment Acquisition/Disposition
Weekly
CC:Mail to Appropriate
BSP SED/IOD and DER
and hard copy to IOD
-do-
-do-
-do-
Daily
-do-
Export Proceeds
Weekly
CC:Mail to Appropriate
BSP SED/IOD and DER
and hard copy to IOD
10
-do-
-do-
-do-
11
12
-do-do-
-do-do-
-do-do-
13
Daily
-do-
Unnumbered
Weekly
A-3
Unnumbered
X503
(Per CL dated 9/05/97)
(Rev. by Cir. 445 dated
8.20.04)
Daily
CC:Mail to appropriate
BSP SED/DER/IOD &
hard copy to IOD
A-3
FX Form 1, Sch. 1
(Formerly FED
Form I, Sch. 16)
Monthly
CC:Mail to appropriate
BSP SED and a copy to
DER/IOD
APP. 6
04.12.3 1
Appendix 6 - Page 19
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
Unnumbered
(Per CL dated 9/05/97)
Monthly
Original - Appropriate
BSP SED
IOD Form 1
(Per CL dated 4.23.03)
Daily
- Annex 1c - Repatriation
IOS Form 4
(BSP 6-22-01)
Monthly
Original - Appropriate
BSP SED
Duplicate - IOD
BSP 5-40-08
Monthly
Original - SDC
Unnumbered
Monthly
Original - SDC
Duplicate Appropriate BSP SED
Unnumbered
Monthly
Original - SDC
Duplicate Appropriate BSP SED
APP. 6
04.12.31
Appendix 6 - Page 20
Category
Category
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
Bi-monthly
Original - SDC
Duplicate - Appropriate
BSP SED
Report on Foreign Exchange Swaps with NonBanks Where 1st Leg is a Purchase of Foreign
Exchange Against Pesos (For banks with
derivatives license)
Weekly
R-4
Monthly
Original - IOD
R-1
Quarterly
Original - IOD
BSP 6-40-04
Semestral
Original - IOD
Monthly
Original - DLC
Unnumbered
Unnumbered
APP. 6
04.12.3 1
Appendix 6 - Page 21
B. TBs
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
PERIODIC REPORTS
A-2
TB Form 1
X116.2
X121.5
X258
Weekly
By electronic mail to
SDC
Weekly
SDC
Weekly
A-2
TB Form 1
Schedule
Weekly
By electronic mail to
SDC
A-2
Unnumbered
Weekly
Every Thursday
By electronic mail to
SDC
A-2
TB Form 1
Schedule 1B
Monthly
A-2
TB Form 2
X162
(Revised December
2003 per MAB
dated 12.30.03)
Monthly
CC:Mail or e-mail to
SDC
APP. 6
04.12.31
Appendix 6 - Page 22
Category
Category
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
Schedules:
2A - Due From Other Banks
2B - Loan Portfolio and Other Accommodations
Page 1 - [Interbank Loans classified as to type
of borrowers, term and Loans and
Other Accommodations (Other than
Interbank Loans) classified as to term
and economic activity]
Page 2 - (Classified as to Security)
Page 3 - (Classified as to type of borrowers,
interest rate, size of firm)
Page 4 - (Borrowings of Local Government
Units) - Classified as to Provincial,
City, Municipal
Page 5 - Microfinance Program (Classified as
to type of client, business enterprise,
interest rate, size of loans, security)
(Revised December 2003 per MAB
dated 12.30.03)
APP. 6
04.12.3 1
Appendix 6 - Page 23
Form No.
MOR Ref.
Report Title
Page 2 - Investments in Bonds and Other
Debt Instruments
Page 3 - Investments and Investments in
Bonds and Other Debt
Instruments (Government Issue Local Government Units)
2D -
Deposit Liabilities
X240.8
2E.1
2E.2
2F
2G
Frequency
Submission
Deadline
Submission
Procedure
APP. 6
04.12.31
Appendix 6 - Page 24
Category
Category
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
M07-TB
2J
2K
2L
2M
2M1
APP. 6
04.12.3 1
Appendix 6 - Page 25
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
Upon transmission
of report to BSP
Monthly
APP. 6
04.12.31
Appendix 6 - Page 26
Category
Category
A-2
Form No.
MOR Ref.
Unnumbered
X116
(Revised September
2003 per Cir. 403
dated 9.19.03)
Report Title
Unnumbered
(no prescribed
form)
X141.9
A-3
TB Form 3
X162
(Revised December
2003 per MAB
dated 12.30.03)
Submission
Deadline
Submission
Procedure
Monthly
Quarterly
-do-
Annually
or as
directors are
elected
Quarterly
Frequency
Schedules:
3A - Breakdown of Due from/Due to Other
Banks and Deposit Liabilities - Banks
APP. 6
04.12.3 1
Appendix 6 - Page 27
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
TB Form 4
X162.9
Original to appropriate
BSP SED
Copy to SDC by
electronic mail or in
diskette form or hard
copy
Original to appropriate
BSP SED
Upon transmission of
PSOC template file
Fax to SDC
TB Form 5
X162
(Revised December
2003 per MAB
dated 12.30.03)
-do-
-do-
Quarterly
Original - Appropriate
BSP SED
Duplicate - SDC
Quarterly
Upon transmission of
report to BSP
APP. 6
04.12.31
Appendix 6 - Page 28
Category
Category
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
Quarterly
By electronic mail or in
diskette form to SDC
A-3
TB Form 5A
Quarterly
A-3
TB Form 6
X162
(Revised December
2003 per MAB
dated 12.30.03)
Quarterly
-do-
TB Form 7
(A03-TB)
Annual
Quarterly
X162.7
A-3
X335
X409.3
Quarterly
-do-
TB Form 9
Page 1
X335
X409.3
Semestral
Page 2
X339.4
-do-
-do-
-do-
APP. 6
04.12.3 1
Appendix 6 - Page 29
A-3
TB Form 8
Report Title
A-3
TB Form 9A
(S04-TB)
X335
X409.3
Semestral
A-3
TB Form 11
(Revised per MAB
dated 4.28.03)
X342.6
Quarterly
By electronic mail to
SDC
Schedules:
1A - Control Prooflist, notarized and signed
by the authorized officer of the bank
A-3
TB Form 12
X341.8
(Revised December
2004 per MAB dated
9.8.04)
Frequency
Submission
Procedure
Form No.
APP. 6
04.12.31
Appendix 6 - Page 30
MOR Ref.
Submission
Deadline
Category
Category
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
TB Form 13
X162
X425.2
Quarterly
APP. 6
04.12.3 1
Appendix 6 - Page 31
Form No.
MOR Ref.
A-3
TB Form 14
X162
X425.2
TB Form 15
X162
(Revised August 2003
per CL dated 8.6.03)
Report Title
Frequency
Submission
Deadline
Submission
Procedure
Quarterly
-do-
-do-
-do-
-do-
Q06-TB
(formerly TB
Form 16)
X162.6
-do-
A02-TB
(formerly TB
Form 16A)
X162.6
Annual
TB Form 17
X162
Semestral
TB Form 18
X164.1
Annual
Annual
APP. 6
04.12.31
Appendix 6 - Page 32
Category
Category
Form No.
MOR Ref.
X164.6
TB Form 20A
X405.9
Frequency
Annual
As contract
is signed
Weekly
Immediately after
receipt of BSP
acknowledgment
receipt
Fax - SDC
Weekly
Weekly
APP. 6
04.12.3 1
Appendix 6 - Page 33
TB Form 20B
Submission
Procedure
Annual
Control Prooflist
A-2
Submission
Deadline
Unnumbered
(no prescribed
format)
A-2
Report Title
Form No.
MOR Ref.
Report Title
Frequency
Control Prooflist
A-2
Submission
Deadline
Submission
Procedure
Immediately after
receipt of BSP
acknowlegment
receipt
Fax - SDC
Weekly
Unnumbered
( suggested
format under Memo
to All Banks and NBFIs
dated 2-21-02)
Annual
Unnumbered
Monthly
Monthly
As
transaction
occurs
- do -
- do -
- do -
Schedules:
1 - General Loan Loss Provisioning
2 - Specific Provisioning-Loans
A-2
Unnumbered
X691.5
(Revised May 2002)
A-2
Unnumbered
X691.5
(Revised May 2002)
APP. 6
04.12.31
Appendix 6 - Page 34
Category
Category
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
A-2
Unnumbered
X691.7
(Cir. 279 dated 4.2.01)
Annually
(Q01-TB)
X162
Quarterly
---
X165.5
Annual
January 15 of the
following year
Unnumbered
X602.1
Monthly
Weekly
Unnumbered
Unnumbered
X162.12
Unnumbered
X262.3
Semestral
Unnumbered
X501.3
(Revised September
2003 per Cir. 403
dated 9.19.03)
Monthly
Monthly
Original - SDC
Duplicate - Approrpiate
BSP SED
X502.4
APP. 6
04.12.3 1
Appendix 6 - Page 35
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
NON-PERIODIC REPORTS
B
TB Form 19
X347.3
Monthly,
whenever
there is an
outstanding
balance
As any direct
or indirect
loan to any
bank director/
officer
is
approved
As
transaction
is approved
Within 10 banking
days from approval
of transaction
On every
dividend
declaration
-do-
-do-
SES II Form 10
SES II Form 12
(NP06-TB)
SES II Form 13
X334
X136.4
SES II Form 14
(NP04-TB)
X156.2
As changes
occur
SES II Form 15
(NP08-TB)
X144
After election
or appointment and as
changes
occur
APP. 6
04.12.31
Appendix 6 - Page 36
Category
Category
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
As necessary
Upon transmission
of the template file of
bio-data
Fax to SDC
As necessary
X162.4
As crime/
incident
occurs
Unnumbered
(no prescribed
form)
X143.4
As
disqualification
occurs
Within 72 hours
from receipt of report
by the BOD
SES Form 6H
(CBP 7-16-21)
revised
X306.5
As write-off
occurs
SES II Form 26
X162.3
Only once;
as change
occurs
X162.1
On every
board
designation/
as change
occurs
APP. 6
04.12.3 1
Appendix 6 - Page 37
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
X144
On every
board
election
X343
As
transaction
occurs
X151.7
X151.8
As transfer
occurs
X153.4
As it occurs
X339
As
amendment
occurs
X565
Monthly
X409.16
As
transaction
occurs
X162.2
Monthly
Unnumbered
(NP09-TB)
Unnumbered
DER Reports
B
FX Form 1A
(Formerly FED
Form 1)
Schedules:
1 - Monthly Summary of Foreign Exchange
Acquisitions/Dispositions
_____________________________
* A report is not required if no transfers were effected during the month.
Monthly
DER
APP. 6
04.12.31
Appendix 6 - Page 38
Category
Category
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
2 - Interbank Transactions
3 - FX Acquisition from Loans (Of Resident
Clients)
4 - FX Disposition for Loans (Of Resident
Clients)
5 - Other Current Accounts and Transfers
Acquisition and Disposition
6 - Investments Acquisition and Disposition
7 - Other Foreign Exchange Acquisitions/
Dispositions
8 - Export Proceeds (Directly Remitted to
Exporter)
Unnumbered
Monthly
DER
Unnumbered
Monthly
DER
RS Form 1 (TB)
Monthly for
loans
granted;
quarterly for
loans
outstanding
DER
APP. 6
04.12.3 1
Appendix 6 - Page 39
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
RS Form 2A-TB
Daily
DER
RS Form 1B (5-17-27)
DER (TR-D01-TB)
As
transaction
occurs
DER
M02-TB
Monthly,
whenever
there is an
outstanding
balance
DER
S03-TB
Semestral,
for banks
with
outstanding
balances
DER
X425.3
As
transaction
occurs
DER
X501.4
Monthly
IOD
Unnumbered
IOD Reports
A-2
M01-TB
(For FCDUs)
A-2
M03-TB
Monthly
IOD
IOS Form 4
Monthly
IOD/Appropriate BSP
SED
Unnumbered
Report on Foreign Exchange Swaps with NonBanks where 1st Leg is a Purchase of Foreign
Exchange Against Pesos (For TBs with
derivatives license)
Weekly
APP. 6
04.12.31
Appendix 6 - Page 40
Category
C. RBs/Coop Banks
Manual of Regulations for Banks
Category
Report Title
Frequency
Submission
Deadline
Submission
Procedure
Form No.
MOR Ref.
A-2
RB/COB
Form 1
X116.2
Weekly
cc:Mail/Diskette/
Harcopy: SDC
A-2
RB/COB
Form 2A
(Rev. 2004
per MAB
dated 5.21.04)
X162
Monthly
cc:Mail/Diskette/
Hardcopy
Control Prooflist
Unnumbered
(Rev. January
2004 per MAB
dated 2.3.04)
Quarterly
Original - SED IV
- solo basis
- consolidated basis
APP. 6
04.12.31
Appendix 6 - Page 41
A-2
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
A-2
Unnumbered
(no prescribed
form)
X141.9
Annually or
as directors
are elected
A-3
RB/COB
Form 2B
(Rev. 2004
per MAB dated
5.21.04)
X162
Quarterly
Original - SDC
Duplicate - SED IV
A-3
RB/COB
Form 3A
(Rev. 2004
per MAB dated
5.21.04)
X162
Quarterly
cc:Mail/Diskette/Hard
copy: SDC/SED IV/DER
A-3
RB Form 3A.1
(Rev. 2002)
X162
Quarterly
cc:Mail/Diskette/Hard
copy: SDC/SED IV
A-3
RB/COB
Form 3B
(Rev. 2004
per MAB dated
5.21.04)
X162
Quarterly
cc: Mail/Diskette/Hard
copy: SDC
A-3
RB/COB
Form 4A
X335
X409.3
Quarterly
Original - SED IV
cc:Mail/Diskette/
Hardcopy
Control Prooflist
APP. 6
04.12.31
Appendix 6 - Page 42
Category
Category
RB/COB
Form 4B
X335
X409.3
Quarterly
Original - SED IV
A-3
RB/COB
Form 5A
(Rev. December
2004 per MAB
dated 9.8.04)
X341.8
Quarterly
Electronic
mail/
Diskette/Hardcopy:
SDC
Quarterly
Upon transmission/
submission of main
report
cc:Mail/Diskette/Hard
copy: SDC (by fax, if hard
copy cannot be submitted
on deadline)
Quarterly
Electronic mail/
diskette: SDC
X342.6
APP. 6
04.12.31
Appendix 6 - Page 43
A-3
RB/COB
Form 5B
(Rev. per
MAB dated
4.28.03)
Frequency
Submission
Procedure
MOR Ref.
A-3
Report Title
Submission
Deadline
Form No.
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
Schedules:
1. Details of Loan Portfolio and Loans to
Small and Medium Enterprises
(Revised per MAB dated 5.21.04)
1.a - Loans granted under Special Financing
2. Loans to Small Enterprises which have
been Rediscounted
3. Loans to Medium Enterprises which have
been Rediscounted
4. Report on Loans Granted to BMBEs
(Revised per MAB dated 4.28.03)
Quarterly
Upon transmission/
submission of main
report
Quarterly
Upon transmission/
submission of main
report
A-3
RB/COB
Form 6
A-3
Unnumbered
3277.6
Annually
Original - SDC
Duplicate - SED IV
A-2
RB/COB
Form 7
X254
Monthly
Original - DLC/BSPRLC
A-2
RB/COB
Form 7A
X254
Weekly
A-2
RB/COB
Form 8
X240.8
-do-
-do-
A-2
Unnumbered
X691.5
(Rev. May 2002)
Quarterly
-doOriginal - SED IV
Duplicate - SDC
APP. 6
04.12.31
Appendix 6 - Page 44
Category
Category
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
As
transaction
occurs
-do-
-do-
-do-
Submission
Procedure
A-2
Unnumbered
X691.5
(Rev. May 2002)
A-2
Unnumbered
(Cir. 279 dated
4.2.01)
X691.7
A-1
RB/COB
Form 9
X162.6
Annually
Quarterly
Original - SED IV
A-1
A-1
RB/COB
Form 10
X162.6
Semestral
Original - SED IV
RB/COB
Form 11
X162
Quarterly
Original - SED IV
RB/COB
Form 12
X409.3
Semestral
Original - SED IV
RB/COB
Form 13
X339.4
Semestral
Original - SED IV
APP. 6
04.12.31
Appendix 6 - Page 45
Form No.
MOR Ref.
Frequency
Submission
Deadline
Submission
Procedure
Upon
adoption or
as change
occurs
Original - SED IV
Annually
Quarterly
Original - SED IV
Duplicate - SDC
RB/COB
Form 14
RB/COB
Form 15
RB/COB
Form 16
X162.7
Annually/
Quarterly
when
change
occurs
Original - SED IV
RB/COB
Form 17
X144
Plantilla of Organization
Annually
and as
change
occurs
Original - SED IV
RB/COB
Form 18
X144
After
election or
appointment and as
change
occurs
cc:Mail/Diskette to SDC
Original - SDC
Duplicate -SED IV
As
necessary
Upon transmission of
the template file of
bio-data
Fax to SDC
(CL dated
1.09.01)
X162.6
Report Title
APP. 6
04.12.31
Appendix 6 - Page 46
Category
Category
Form No.
MOR Ref.
Report Title
If submitted in diskette form - Notarized first
page of each of the directors'/officers' bio-data
saved in diskette and control prooflist
Frequency
Submission
Deadline
Submission
Procedure
As
necessary
RB/COB
Form 19
X156.2
Upon
opening or
as change
occurs
Original - SED IV
RB/COB
Form 20
X162.5
As
transaction
occurs
Original - SED IV
RB/COB
Form 21
X162.4
As incident
occurs
Original - SED IV
Duplicate - SITD
X162.4
Upon
termination
of investigation
Original - SED IV
Duplicate - SITD
X143.4
As disqualification
occurs
Original - SED IV
As incident
occurs
Original - SED IV
Duplicate - SITD
Unnumbered
(no prescribed
form)
RB/COB
Form 22
APP. 6
04.12.31
Appendix 6 - Page 47
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
RB/COB
X306.5
Form 23
(Rev. per Cir. 463
dated 12.29.04)
As write-off
occurs
Original - SED IV
RB/COB
Form 24
X136.4
Every
dividend
declaration
Original - SED IV
RB/COB
Form 25
X144
Annually
Original - SED IV
RB/COB
Form 26
X334
As
transaction
occurs
Original - SED IV
No Format
Annually
Original - SED IV
No Format
Annually
Original - SED IV
As contract
is signed
Copy to SED IV
X164
Unnumbered
Unnumbered
X233.9
Monthly
Original - SED IV
Unnumbered
X162.2
As
designation
by bank's
board of
directors
occurs
Within 3 banking
days from the date
the designation/
change occurs
Original - SED IV
APP. 6
04.12.31
Appendix 6 - Page 48
Category
Category
B
Form No.
MOR Ref.
Report Title
Frequency
Submission
Deadline
Submission
Procedure
Unnumbered
X262.3
Semestral
Within 7 banking
days after end of June
and December
Original - SED IV
Unnumbered
X425.3
As
transaction
occurs
DER
As
transaction
occurs
X409.16
SED IV
APP. 6
04.12.31
Appendix 6 - Page 49
APP. 7
96.12.31
Name of bank
2.
Address
3.
P. O. Box Number
4.
5.
6.
Appendix 7 - Page 1
APP. 8
98.12.31
DOCUMENTS/INFORMATION ON ORGANIZATIONAL
STRUCTURE AND OPERATIONAL POLICIES
(Appendix to Subsec. X162.3)
1.
2.
5.
3.
6.
4.
7.
Appendix 8 - Page 1
APP. 9
03.12.31
Definitions
1.
2.
3.
Subsidiary refers to a corporation or firm more than fifty percent (50%) of the outstanding
voting stock of which is directly or indirectly owned, controlled or held with power to
vote by a bank. A domestic subsidiary is any subsidiary domiciled in the Philippines
and incorporated under the laws of the Philippines, while a foreign subsidiary is a
subsidiary incorporated and organized under the laws of a foreign country.
4.
5.
Cost method refers to the accounting method of recording at cost, and continuously
carrying at cost, equity investment, regardless of increases or decreases in the underlying
value of the investments resulting from earnings or losses of the affiliate/subsidiary.
6.
Equity method refers to the accounting method of recording equity investments at cost
and adjusting the balance of the account to reflect increases or decreases in the
underlying value of the investments arising from earnings or losses of the affiliate or
subsidiary.
B.
Consolidation Requirements
1.
The financial statements of allied undertakings shall be consolidated with those of the
investing bank only when the allied undertaking is a subsidiary and a financial allied
undertaking.
Appendix 9 - Page 1
APP. 9
96.12.31
2.
3.
C.
Consolidation Procedures
1.
(b)
(c)
Appendix 9 - Page 2
APP. 9
96.12.31
(d)
(e)
(f)
(g)
2.
All the remaining assets and liabilities of the subsidiaries shall be transferred to
appropriate accounts of the investing bank;
For not wholly-owned subsidiaries, the share of minority stockholders/interest in
the capital stock and retained earnings of such subsidiaries shall be segregated
and lodged under Minority Interest in Subsidiary account which shall be shown
as a separate section between the Liabilities and Stockholders Equity sections of
the Consolidated Statement of Condition;
Other generally accepted consolidation principles/procedures not inconsistent
herewith may be adopted; and
Consolidating adjustments and eliminations shall appear only on working papers
and shall not be recorded in the books of the individual entities concerned.
For consolidated statement/report purposes, the following accounts shall be used for
the differences between cost and book value of equity investments on date of acquisition:
(a)
(b)
Excess of Book
Value over Cost of
Equity Investments
The first account shall be shown under Other Assets caption while the second account
shall be shown under the caption Unearned Income and Other Deferred Credits in
the Consolidated Statement of Condition.
3.
The investments (which are recorded at the cost method) of the investing bank in
allied undertaking/subsidiaries/affiliates whose financial statements are not consolidated
shall be adjusted for their share in the earnings or losses of such entities, with the use
of the equity method as defined in Item A above. However, these adjustments shall
appear only in working papers and shall not be recorded in the books of the individual
entities concerned.
D.
Disclosures
The following schedules/disclosures shall be attached to/made in the consolidated
financial statements:
1.
Appendix 9 - Page 3
APP. 9
96.12.31
(d)
(e)
(f)
2.
3.
Appendix 9 - Page 4
APP. 10
96.12.31
Appendix 10 - Page 1
APP. 11
02.12.31
The order of withdrawal form shall have a size of three (3) inches by seven (7) inches,
and shall be on security/check paper. It shall contain as a minimum the features contained
in the following pro-forma order of withdrawal:
FRONT
Acct. No. ______
No. _______
ORDER OF WITHDRAWAL
"NOW" ACCOUNTS
____________, 20 ___
Pay to ____________ the amount of PESOS _________________ (P________)
NAME OF DRAWEE BANK
Address
Drawer/Depositor
BACK
Important
1. This order of withdrawal shall be payable only to a specific person, natural or juridical,
and not to bearer nor to the order of a specific person.
2. Only the payee can encash this order of withdrawal with the drawee bank, or deposit it in
his account with the drawee bank or with any other bank.
Appendix 11 - Page 1
Issue Date
: _________, 19 ______.
Maturity Date : _________, 19 ______.
FOR PESOS ______________________________________________ (P________), RECEIVED. ______________________________
(Present Value/Principal)
(Name of Issuer/Maker)
promises to pay ____________________________________ or order, the sum of PESOS ____________________________________
(Name/Account Number of Payee)
(Maturity Value/Principal & Interest)
(P__________), subject to the terms and conditions on the reverse side hereof.
Appendix 12 - 2 Page 1
_______________________________
Duly Authorized Officer
APP. 12
96.12.31
No Pretermination
This promissory note shall not be honored or paid by the issuer/maker before the maturity
date indicated on the face hereof.
3. Liquidated Damages
In case of default, issuer/maker shall pay, in addition to stipulated interest, liquidated
damages of (amount or %), plus attorneys fees of (amount or %) and costs of collection
in case of suit.
4. Renewal
( )
( )
No automatic renewal.
Automatic renewal under the following terms:
______________________________________________________________________
______________________________________________________________________
5. Collateral/Delivery
( ) No automatic renewal
( ) Collateralized/secured by (describe collateral)
( ) Physically delivered to payee
( ) Evidenced by Custodian Receipt No. _______________________ dated
__________________________ issued by _______________________.
( ) Collateralized/secured by (fraction or %) share of (describe collateral)
as evidenced by Custodian Receipt No. ___________ dated _________
issued by ______________________________.
6. Substitution of Securities
( ) Not acceptable to Payee
( ) Acceptable to payee, however, actual substitution shall be with prior written consent of payee.
7. Separate Stipulations
( ) This Agreement is subject to the terms and conditions of (describe document) dated
_______________________, executed by (name of party/ies) and made an integral part
hereof.
Appendix 12 - Page 2
Original
Serial Number/s
Face Value
P
Interest/Yield
P
CONFORME:
_________________________
(Signature of Vendee)
_________________________
Duly Authorized Officer
APP. 12
96.12.31
Appendix 12 - Page 3
TOTAL
Maturity Date/s
APP. 12
96.12.31
Computation of Yield
Yield is hereby stipulated/computed at ____________ % per annum, compounded
( ) monthly
( ) quarterly
( ) semi-annually
( ) others
2.
No Pretermination
Vendor shall not repurchase subject security/ies before the repurchase date stipulated
on the face of this document.
3.
Liquidated Damages
In case of default, the Vendor shall be liable, in addition to stipulated yield, for liquidated
damages of (amount or %), plus atttorneys fees of (amount or %) and costs of collection
in case of suit.
4.
Renewal
( ) No automatic renewal
( ) Automatic renewal under the following terms:
________________________________________________________________
________________________________________________________________
5.
Delivery/Custody of Securities
( )
( )
6.
Substitution of Securities
( )
( )
7.
Separate Stipulations
( )
This Agreement is subject to the terms and conditions of (describe document) dated
_______________________________, executed by (name of party/ies) and made an
integral part hereof.
Appendix 12 - Page 4
Original
Serial Number/s
Maturity Date/s
TOTAL
Face Value
P
Interest/Yield
P
C O N F O R M E :
_______________________
(Signature of Assignee)
_________________________
Duly Authorized Officer
APP. 12
96.12.31
Appendix 12 - Page 5
and Assignor hereby undertakes to pay, jointly and severally with the Principal Debtor, the face value of, and the interest/yield on,
said debt securites. This assignment shall be subject to the terms and conditions on the reverse side hereof.
APP. 12
96.12.31
Appendix 12 - Page 6
Original
Serial Number/s
Maturity Date/s
TOTAL
Face Value
P
Interest/Yield
P
C O N F O R M E :
_______________________
(Signature of Assignee)
_________________________
Duly Authorized Officer
APP. 12
96.12.31
Appendix 12 - Page 7
and hereby undertakes that in case of default of the Principal Debtor, Assignor shall pay the face value of interest/yield on, said debt
securities, subject to the terms and conditions on the reverse side hereof.
APP. 12
96.12.31
Appendix 12 - Page 8
Original
Serial Number/s
Maturity Date/s
T O T A L
Face Value
Interest/Yield
C O N F O R M E :
__________________________
(Signature of Participant)
________________________________
(Duly Authorized Officer)
APP. 12
96.12.31
Appendix 12 - Page 9
The issuer shall pay, jointly and severally with the principal debtor, _____________________________________________ share of
the
(fraction or %)
face value of, and the interest/yield on, said debt security(ies), subject to the terms and conditions on the reverse side hereof.
APP. 12
96.12.31
No Pretermination
Issuer shall not pay nor repurchase the participation before the maturity date of subject
security(ies).
2.
Liquidated Damages
In case of default, the issuer of this instrument shall be liable, in addition to interest, for
liquidated damages of (amount or %), plus attorneys fees of (amount or %) and costs of
collection in case of suit.
3.
Delivery/Custody of Securities
( ) Physically delivered to Participant
( ) Evidenced by Custodian Receipt No. _________________ dated _____________,
issued by _________________________________.
4.
Separate Stipulations
( ) This Agreement is subject to the terms and conditions of (describe document)
_______________ dated _________________ executed by (name of party/ies)
and made an integral part hereof.
Appendix 12 - Page 10
Original
Serial Number/s
Maturity Date/s
T O T A L
Face Value
P
Interest/Yield
P
C O N F O R M E :
__________________________
(Signature of Participant)
________________________________
Duly Authorized Officer)
APP. 12
96.12.31
Appendix 12 - Page 11
In case of default of the Principal Debtor, the issuer shall pay the _______________________________________________ share of the
(fraction or %)
face value of, and the interest/yield on, said debt security(ies), subject to the terms and conditions on the reverse side hereof.
APP. 12
96.12.31
No Pretermination
Issuer shall not pay nor repurchase the participation before the maturity date of subject
security(ies).
2.
Liquidated Damages
In case of default, the issuer of this instrument shall be liable, in addition to interest, for
liquidated damages of (amount or %), plus attorneys fees of (amount or %) and costs of
collection in case of suit.
3.
Delivery/Custody of Securities
( ) Physically delivered to Participant
( ) Evidenced by Custodian Receipt No. __________________________ dated
___________________, issued by _________________________________.
4.
Separate Stipulations
( ) This Agreement is subject to the terms and conditions of (describe document)
________________ dated _________________ executed by (name of party/ies)
and made an integral part hereof.
Appendix 12 - Page 12
APP. 13
96.12.31
Appendix 13 - Page 1
APP. 13
96.12.31
b. Financial Ratios
A registrant who meets such standard,as
may be prescribed by the Commission, based
on the following complementary financial
ratios for each of the immediate past three
(3) fiscal years:
1) Ratio of (a) the total cash, marketable
securities, current receivables to (b) the total
of current liabilities;
2) Debt-to-equity ratio, with debt referring
to all kinds of indebtedness, including
guarantees;
3) Ratio of (a) net income after taxes to (b)
net worth.
4) Net profits to sales ratio; and
Appendix 13 - Page 2
APP. 13
96.12.31
Appendix 13 - Page 3
APP. 13
96.12.31
Appendix 13 - Page 4
APP. 13
96.12.31
Appendix 13 - Page 5
APP. 13
96.12.31
Appendix 13 - Page 6
APP. 13
96.12.31
20,000
Appendix 13 - Page 7
APP. 13
96.12.31
Appendix 13 - Page 8
APPROVED:
APP. 14
96.12.31
Appendix 14 - Page 1
APP. 14
96.12.31
Appendix 14 - Page 2
Current Assets
Current Liabilities
Current Ratio =
OR
Average annual return on equity shall be
at least 8% computed as follows:
Return on equity =
Interest service
coverage ratio = Interest expense
APP. 14
96.12.31
Appendix 14 - Page 3
APP. 14
96.12.31
Appendix 14 - Page 4
APP. 14
96.12.31
Appendix 14 - Page 5
APP. 14
96.12.31
Appendix 14 - Page 6
APP. 14
96.12.31
Appendix 14 - Page 7
APP. 14
96.12.31
Appendix 14 - Page 8
APP. 15
96.12.31
Appendix 15 - Page 1
APP. 15
96.12.31
National Food Authority (NFA) Bonds
NHMFC Bahayan Certificates
Light Rail Transit Authority (LRTA) Notes CBCIS
(Auctioned/discounted) - 24th -29thSeries
CBCIs (Negotiated) A to D-1 Series and 5th
to 7th Series (18 months)
CBCIs 10-1/2% Special Series 1st - 32nd
Series
Central Bank Bills (Negotiated/discounted)
Treasury Bills (Negotiated/discounted)
Treasury Notes and Treasury Bonds bearing
less
than four percent (4%) per annum,
but not given BSP support as follows:
Treasury Bonds
2% T/Bond L of 1973/2003 4th Series
2-3/4% T/Bond L of 1974/1986 7-A & 7-B
Series
3% T/Bond L of 1976/2001 26th, 27th, 31st 34th 46th & 47th Series
3% T/Bond L of 1977/2002 49th Series
3-1/4% T/Bond L of 1974/1999 6th Series
3rd & 4th Release
Treasury Notes
2% T/Notes L of 1976/1991 79th Series
3% T/Notes L of 1982/1997 128th Series
3% T/Notes L of 1981/1986 120th Series
& 125th Series
3-1/2% T/Notes L of 1982/1997 Special Series
1st-24th Release
Appendix 15 - Page 2
APP. 16
04.12.31
Section 2.
1.1
1.2
1.3
Qualified Participants
The Program shall be open to the following:
2.1 All Countryside Financial Institutions (CFIs) that meet the eligibility
requirement set by the BSP except those with unrectified/unaddressed
serious irregularities based on the examination findings of the BSP.
The term CFIs shall refer to all rural banks, cooperative banks and
thrift banks, which have their main operations in the countryside.
Section 3.
2.2
Thrift banks as may be determined by the Task Force which have their
main operations in the countryside.
2.3
Appendix 16 - Page 1
APP. 16
04.12.31
Section 4.
Section 5.
Section 6.
a.
b.
Definition of Terms
As used in these Guidelines:
6.1 Investor shall refer to individuals, group of individuals, cooperative
and all CFIs that meet the eligibility requirements set by the BSP except
those CFIs with unrectified/uncorrected serious irregularities based on
the examination findings of the BSP.
6.2 Arrearages shall refer to the CFIs arrearages with BSP as of December
31, 2001 which are eligible for buy-back such as past due rediscounted
loans, special liquidity loans, CBP-IBRD loans and other supervised credit
programs, including those other arrearages as the Task Force may
determine.
6.3 Converted Shares - shall refer to the arrearages converted into LBP equity
in the form of common and preferred shares pursuant to BSP Circular Nos.
1143 and 1172.
Appendix 16 - Page 2
APP. 16
04.12.31
Section 7.
Counterpart capital infusion by the LBP by a ratio of more than oneto-one of the merged, consolidated or acquired CFIs total fresh
equity;
b.
Appendix 16 - Page 3
APP. 16
04.12.31
Section 8.
c.
d.
The term of the loan shall be for a period of at least six (6) years.
A past due loans ratio of not more than twenty-five percent (25%);
and
b.
A loan portfolio at least sixty percent (60%) of which is in agriculture or rural-based production activities.
8.3 Under Module III, PDIC financial assistance shall be available to merging,
consolidating or acquiring CFIs involving at least one (1) or more
undercapitalized banks.
A separate memorandum shall be issued on the guidelines for the LBP
equity matching program and PDIC financial assistance.
8.4 Investors/CFI stockholders will be evaluated based on the fit and proper
rule under Sec. X143 and other criteria that the Task Force may set.
CFIs investing in undercapitalized CFIs should have a minimum
unimpaired capital as defined under Secs. X106 and X116 and a history
of sustained profitability for a period of at least five (5) years.
Appendix 16 - Page 4
APP. 16
04.12.31
8.5 Fresh investments should at least cover the additional capital to achieve
the required minimum risk-based capital adequacy ratio of ten percent
(10%) after adequate provision for losses based on the latest examination
findings of the appropriate supervising and examining department.
Section 9.
Application Procedures*
9.1 Purchase of Arrearages under Module I
a.
(2)
(3)
b.
c.
d.
e.
f.
g.
Appendix 16 - Page 5
APP. 16
04.12.31
Appendix 16 - Page 6
APP. 17
96.12.31
Appendix 17 - Page 1
APP. 17
96.12.31
the issuing bank and custodian banks; and (b) the rights of the holders of the certificates;
(c) the mortgages making up the pool; and (d) the aggregate value of the certificates
that may be issued.
H. The agreement shall be available for inspection at reasonable hours during business
days to the holders of the certificates, or their duly authorized representatives.
I.
J.
A five percent (5%) reserve shall be maintained against all issues of mortgage/chattel
mortgage certificates. The Monetary Board may change the required reserves as may
be necessary.
K. Any thrift bank desiring to apply for authority to issue mortgage/chattel mortgage
certificates may submit its application to the appropriate supervising and examining
department of the Bangko Sentral duly accompanied by the following documents:
1. Pro-forma copies of the mortgage/chattel mortgage certificates proposed to be
issued and the agreement referred to in Item G thereof;
2. Statement setting forth the details or particulars of the mortgages/chattel mortgages
to be pooled for purposes of the issue and the purpose for which the proceeds
will be used; and
3. Other records or data as the appropriate supervising and examining department
may deem necessary for the proper evaluation of the bank's application.
Appendix 17 - Page 2
APP. 18
02.12.31
Appendix 18 - Page 1
APP. 18
02.12.31
Appendix 18 - Page 2
APP. 18
03.12.31
Appendix 18 - Page 3
APP. 18
03.12.31
Classification
91 - 120
121 - 180
181 or more
Substandard
Doubtful
Loss
Appendix 18 - Page 4
APP. 18
03.12.31
6th Year
7th Year
8th Year
9th Year
10th Year
Annual
Provision
to Cost of Accumulated
Acquisition
Reserve
10%
10%
10%
10%
10%
10%
20%
30%
40%
50%
1st Year
2nd Year
3rd Year
Annual
Provision
to Cost of Accumulated
Acquisition
Reserve
50%
30%
20%
50%
80%
100%
E. Accounts Receivable
1. Accounts receivable arising from
loan and investment accounts still
uncollected after six (6) months from the date
Appendix 18 - Page 5
APP. 18
03.12.31
Classification
61 - 180
181 - 360
361 or more
Substandard
Doubtful
Loss
Appendix 18 - Page 6
A. Specific allowance
Allowance
Classification
(Percent)
1. Unclassified
0.0
2. Loans Especially Mentioned 5.0
3. Substandard
(a) Secured
10.0
(b) Unsecured
25.0
4. Doubtful
50.0
5. L o s s
100.0
B. General allowance. In addition to
the specific allowance for probable losses
required under Item "A", a general provision
for loan losses shall also be set up as follows:
(1) Five percent (5%) of the outstanding
balance of unclassified restructured loans less
the outstanding balance of restructured loans
which are considered non-risk under existing
laws, rules and regulations: Provided, That
loans restructured/rescheduled under the
debt relief and rehabilitation program for
borrowers adversely affected by the super
typhoon last July 20, 2003 in the Province
of Isabela shall be treated as regular loans
and shall be subject to the general loan loss
provision of one percent (1%) instead of five
percent (5%) applicable to restructured loans:
Provided, further, That the restructuring/
rescheduling of said loans are effected not
later than December 31, 2003: Provided,
finally, That the restructured/rescheduled
loans are subsequently maintained in
performing status or have complied with the
terms of the restructuring agreement.
(2) One percent (1%) of the outstanding
balance of unclassified loans other than
restructured loans less loans which are
considered non-risk under existing laws,
rules and regulations.
APP. 18
03.12.31
P xxx
xxx
xxx
xxx
xxx
P
xxx
Allowance for
probable losses (%)
1 - 30
31 - 60 and/or loans
restructured
once
61 - 90
91 - or more and/or
loans restructured
twice
2
20
50
100
Appendix 18 - Page 7
APP. 19
96.12.31
P____________
P_________
_____________
_____________
_____________
_____________
__________
__________
__________
__________
_____________
_____________
__________
__________
P ____________
P _________
_____________
P _____________
_____________
_____________
_____________
__________
P __________
__________
__________
__________
_____________
_____________
P ____________
__________
__________
P __________
( ) Simple
( ) Compound
P __________
P __________
(C)
(D)
Appendix 19 - Page 1
APP. 19
96.12.31
6. PERCENTAGE OF FINANCE CHARGES TO TOTAL AMOUNT
FINANCED (Computed in accordance with
Subsec. X301.1 ............................................
_______%
7. EFFECTIVE INTEREST RATE .........................
(Method of computation attached)
8. SCHEDULE OF PAYMENT
a. Single payment due on _________
(Date)
b. Total Installment Payments
Payable _______________ in months/year
(no. of payments)
at P ________ each installment.
_______% p.a.
P _______
P ________
9. COLLATERAL
This loan is wholly/partly secured by(check)
real estate
chattels
government securities
UNSECURED
10. ADDITIONAL CHARGES IN CASE CERTAIN STIPULATIONS ARE NOT MET BY THE
BORROWER
Nature
____________________________
____________________________
____________________________
Amount
____________
____________
____________
CERTIFIED CORRECT:
_______________________________
(Signature of Creditor/Authorized
Representative Over Printed Name)
_______________________________
Position
I ACKNOWLEDGE RECEIPT OF A COPY OF THIS STATEMENT PRIOR TO THE CONSUMMATION OF THE CREDIT TRANSACTION AND THAT I UNDERSTAND AND FULLY AGREE
TO THE TERMS AND CONDITIONS THEREOF.
_______________________________
(Signature of Borrower over
Printed Name)
Date ______________
Notice to Borrower: You are entitled to a copy of this paper which you shall sign.
Appendix 19 - Page 2
APP. 20
96.12.31
FORMAT OF
ABSTRACT OF "TRUTH IN LENDING ACT"
(Republic Act No. 3765)
(Appendix to Sec. X307.4)
Section 1. This Act shall be known as the
"Truth in Lending Act."
Sec. 2. Declaration of Policy. It is hereby
declared to be the policy of the State to
protect its citizens from a lack of awareness
of the true cost of credit to the user by assuring
a full disclosure of such cost with a view of
preventing the uninformed use of credit to
the detriment of the national economy.
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
Appendix 20 - Page 1
APP. 20
96.12.31
xxx
xxx
Appendix 20 - Page 2
APP. 21
01.12.31
Appendix 21 - Page 1
APP. 21
01.12.31
The BSP is hereby designated as the settlement bank for the settlement of all IBCL transactions
transmitted through the System. Further, the BSP shall be the exclusive systems provider and
operator for the BSP Gateway Server and Financial Accounting System (FAS) where the electronic
settlement of IBCL transactions are processed, computed, and stored for the System.
2.0
2.1
2.1.1 Front-end software The front-end software shall be deployed at each Participants offices. This
software shall be developed and maintained by PCHC. The front-end software shall allow each
Participant to enter its IBCL transactions (the Electronic Transfer Instructions) and transmit these
electronically to the BSP through the PCHC server in a secure manner.
2.1.2 The PCHC Server The PCHC Server shall receive the Electronic Transfer Instructions from the
Participants through PCHCs telecommunications network, validate and authenticate each
electronic transfer instruction, and immediately relay these to the BSPs FAS through the BSP
Gateway.
2.1.3 The BSP Gateway Server The BSP Gateway Server shall act as a transit point for the Electronic
Transfer Instructions and status files being transferred between the PCHC Server and the BSPs
FAS.
2.1.4 The BSPs FAS The FAS of the BSP is the general ledger system of the BSP wherein all accounting
entries to the BSPs books as well as the Participants Demand Deposit Accounts (DDAs) are
recorded electronically. The FAS also generates the statements of account for the DDAs which
are sent electronically through the BSP cc:Mail System to the Participants on a regular basis.
2.1.5 The BSPs cc:Mail System The BSPs cc:Mail system shall be used as the main delivery facility
for sending official DDA statements and for communicating messages to the Participants.
2.2
2.2.1 Log-in IDs and passwords To ensure that only authorized personnel are able to enter and
authorize transactions through the System;
2.2.2 Maker/Checker Functions To ensure that at least two (2) authorized personnel of each Participant
are involved in the inputting, approval, and transmission of Electronic Transfer Instructions into
the System;
2.2.3 Test Keys Authentication against PCHC and BSP To ensure that the Electronic Transfer Instructions
received are coming from authorized sources; and
2.2.4 Firewalls To prevent unauthorized access to the BSPs internal systems.
3.0
MARKET CONVENTIONS The following market conventions shall be followed in the IBCL
market:
Appendix 21 - Page 2
APP. 21
01.12.31
3.1 IBCL Settlement Timeframe - Transactions shall be concluded by and among Participants during
the settlement timeframe prescribed by BSP Circular 266 series of 2000 dated November 7, 2000.
The timelines for IBCL transactions shall be as follows:
7:30 A.M.
7:45 A.M.
7:46 A.M.
8:46 A.M
8:45 AM
9:00 A.M.
9:01 A.M.
9:45 A.M.
9:46 A.M.
10:01 A.M.
4:01 P.M.
10:00 A.M.
4:00 P.M.
4:16 P.M.
4:30 P.M.
5:00 P.M.
5:01 P.M.
5:30 P.M.
5:31 P.M.
6:30 P.M.
3.1.1 From 7:30 to 7:45 A.M., the morning returned COCI receiving window shall be open for banks
who are affected by returned COCI items where adjustments are made to the DDAs for value the
previous day. In this case, it shall be necessary for the affected banks to either borrow or lend
funds for value the previous day in order for their DDAs to be in compliance with the necessary
reserve levels. This backvalue window shall be open from 9:01 A.M. and 9:45 A.M.
3.1.2 The regular trading window shall be from 10:01 A.M. to 4:00 P.M. for the trading and settlement
of same-day value IBCL transactions. There shall be a temporary closure of the System at 4:01
P.M. to allow the BSP to post the results of the PCHC Peso Netting and Electronic Check clearing
operations to the respective DDAs of individual Participants. The regular window shall be then
reopened from 5:31 P.M. to 6:30 P.M. to allow IBCL trading for same-day funds to cover funding
or reserve shortfalls resulting from check clearing results.
3.2
Confirmation Process The following procedures shall be used by Participants for confirming
IBCL transactions:
3.2.1 IBCL transactions concluded during any of the trading windows shall be confirmed by telephone
prior to settlement to ensure that all transaction details are in order. Responsibility for initiating
the phone confirmation shall lie with the borrowing party.
Appendix 21 - Page 3
APP. 21
01.12.31
3.2.2 Written confirmations shall also be sent by both parties for proper control and documentation.
For SWIFT member institutions, it is strongly suggested that such confirmations be sent electronically
through the SWIFT network using the SWIFT MT 320 format.
3.2.3 Discrepancies, if any, shall be resolved by both parties on mutually acceptable basis. Voice logs,
if available, shall be resorted to in aid of resolution of the discrepancy. Any discrepancies not
resolved shall be subjected to the process in Section 8.0 below entitled Settlement of Disputes
Among Participants.
3.3 Settlement Instructions- Settlement instructions for IBCL transactions shall be initiated as follows:
3.3.1 For new IBCL transactions, the Lender shall be responsible for sending the proper Electronic
Transfer Instructions on the given transaction date. The Electronic Transfer Instructions shall be
sent through the System and shall consist of an instruction to the BSP to debit the Lenders DDA
account and credit the Borrowers DDA account. For transactions in the morning IBCL window
that covers returned COCI items, the value date of the debit/credit shall be for the previous day, as
defined in section 3.1. For transactions during the regular IBCL window, the value date shall be
the same as the transaction date.
3.3.2 For maturing IBCL transactions, the Borrower shall be responsible for sending the proper Electronic
Transfer Instructions on the maturity date of the transaction. The Electronic Transfer Instructions
shall be sent through the System and shall consist of an instruction to the BSP to debit the Borrowers
DDA account and to credit the Lenders DDA account for the maturity value of the transaction.
3.3.3 Transactions with the BSP Participants transactions with the BSP shall be handled as follows:
Reverse Repurchase Agreements (RRPs) For RRPs, the lending Participant shall be
responsible for sending the proper Electronic Transfer Instructions on the transaction date. The
Electronic Transfer Instructions shall be sent through the System and shall consist of an instruction
to the BSP to debit the Lenders DDA account for the fund placement. On maturity date of the
RRP, the BSP shall be responsible for crediting the DDA of the lender during the first hour that the
System is up. Credit shall be performed using the BSPs FAS.
Repurchase Agreements (RPs) For RPs, the BSP shall be responsible for crediting directly
the borrowers DDA using the BSPs FAS. On maturity date, the BSP shall debit the borrowers
DDA for principal plus interest using the BSPs FAS.
Debits and credits to DDA of Participants resulting from RRP and RP transactions with the
BSP shall be part of the statements of account broadcast by the BSP on an hourly basis under
Section 3.6 below.
3.4 Transaction Status Verification Participants shall be able to verify the status of their Electronic
Transfer Instructions as follows:
3.4.1 Using the front-end software, the BSP Update Status Report may be downloaded by Participants
to print the status of transactions. These transactions may have one of five (5) status:
Appendix 21 - Page 4
APP. 21
01.12.31
(R) Rejected Transaction has been rejected because it has failed BSP authentication;
(C) Cancelled Transaction has been cancelled by the BSP because of insufficient funds by
cutoff time;
(P) Pending Transaction has been received at the BSP but has not yet been settled, temporarily queued;
(S) Settled Transaction has been received at the BSP and corresponding debit and credit
entries have already been posted on the respective DDAs.
Blank Electronic Transfer Instruction has been sent to the BSP Gateway Server but has not yet
been transferred to the FAS for processing.
3.4.2 Both the sending and receiving parties can view the status of their transactions.
3.4.3 It is recommended that Participants view their transaction status on an hourly basis.
3.4.4 Final and official DDA settlement reports shall be available from the BSPs cc:Mail server on an
hourly basis.
3.5
Settlement of IBCL transactions The following rules shall govern the settlement of IBCL
transactions at the BSP.
3.5.1 Upon receipt of the Electronic Transfer Instructions through the System, settlement of IBCL
transactions shall be performed with finality (i.e. cannot be reversed) by the BSP through the
Participants respective DDAs. These accounting entries shall be passed using the BSPs FAS.
3.5.2 Debit instructions shall be settled by the BSP on a gross, transaction-by-transaction, First-In-FirstOut basis. The FAS timestamp shall be used for FIFO processing and settlement of the Electronic
Transfer Instructions. The PCHC MIPS server timestamp shall be used as the official time of
receipt of the Electronic Transfer Instructions into the System and shall be used to control the cutoff times.
3.5.3 It is understood that the BSP shall only post debit instructions if the sending Participants DDA is
adequately funded. Otherwise, the transaction shall not be posted and shall be held in queue.
3.5.4 If a transaction is held in queue due to inadequate DDA balances, other succeeding transactions
which are of lower value and which are within the available DDA balances shall be posted ahead
of the transaction which was held in queue.
3.5.5 Transactions held in queue shall remain there until adequate funds are received by the DDA to
allow posting.
3.5.6 Transactions that remain in queue until the IBCL window closes shall be cancelled from the
System. For the back-value IBCL window, the cut-off shall be 9:45 A.M. For the regular same-day
IBCL window, there shall be two cut-offs, one at 4:01 P.M. and the final cutoff at 6:30 P.M.
Appendix 21 - Page 5
APP. 21
01.12.31
3.5.7 The BSP reserves the right to withhold all or part of a Participants DDA balances from settlement
of IBCL transactions, subject to the Monetary Boards instructions.
3.5.8 Where applicable, the BSPs transactions with the Participants shall be posted in the BSPs FAS
before the System opens for the regular IBCL window from 10:01 A.M. to 4:00 P.M. These
transactions shall include tax payments, maturing rediscount loans, maturing repurchase
agreements, maturing reverse repurchase agreements, and other transactions of Participants with
the BSP.
3.5.9 Participants shall endeavor to transmit all repayment instructions for maturing IBCL borrowings
during the first hour of operation of the System in order to improve liquidity in the System.
3.6 BSP Hourly Broadcast of DDA Statements:
3.6.1 BSP shall broadcast, on an hourly basis, each Participants running DDA transactions and balances
for the day using the cc:Mail system.
3.6.2 IBCL transactions reflected in the DDA statement retrieved from cc:Mail shall be considered as
final and irrevocable. No unwinding of transactions shall be allowed except check clearing
results which are reversed using the returned COCI window.
3.6.3 Participants shall be responsible for designating authorized personnel who shall have access to
their DDA balance information from the BSP. The BSP shall open cc:Mail accounts for each of
these designated personnel at the BSPs mail server.
3.6.4 Participants shall be responsible for reconciling their transactions against the DDA statements
received from the BSP. Any discrepancies shall immediately be advised in writing or through cc
Mail message to the BSP for correction/rectification.
4.0 AVAILABILITY OF SERVICES The services outlined in this Agreement shall be available at the
PCHC as well as the BSP at a fixed hour on all banking days, including local holidays. For purposes of
this Agreement, banking days refer to the days when the BSP is open for business and settlement of
transactions contemplated herein.
4.1 The PCHC and the BSP shall endeavor to develop, test, and communicate to all Participants a
Continuity of Business (COB) plan aimed at providing continuous operation of the System. This
COB plan shall incorporate various scenarios that may occur such as but not limited to hardware
failure, fire, power outage, telecommunications outage, typhoon, earthquake, flood, civil
disturbances, or other events at either the BSP site or the PCHC site.
4.2 Each Participant shall be responsible for developing and testing its own COB plan and ensuring
that back-up machines, backup files, telephone lines, and other necessary equipment are available
at their site or back-up site to allow continuous operations under the various scenarios above.
4.3 The PCHC shall also make available a desktop PC as an input facility for the use of any Participant
who is unable to enter data through its own facilities.
Appendix 21 - Page 6
APP. 21
01.12.31
7.1 The PCHC shall be responsible for the development, testing, and maintenance of the software for
both the Participants front-end software, the PCHC MIPS server, and the interface software with
the BSPs FAS. The PCHC shall provide updates to the software as may be required by the Participants and shall charge applicable one-time development fees accordingly.
7.2 The PCHC shall be responsible for providing, maintaining, and upgrading the PCHC MIPS server,
including the necessary data telecommunications facility to access the server, and ensure that
adequate COB plans are in place for uninterrupted operations.
7.3 The PCHC shall be responsible for exchanging authentication test keys with all Participants and
implementing regular changes thereto.
Appendix 21 - Page 7
APP. 21
01.12.31
7.4 The BSP shall be responsible for ensuring that the BSP Gateway Server is operative and that adequate
backup facilities are made available to have continuous and efficient operation of the System. The
BSP shall also be responsible for ensuring the integrity and continued operation of its FAS which is
an integral part of the system.
7.5 The BSP shall be responsible for exchanging authentication test keys with all Participants and
implementing regular changes thereto.
7.6 The BSP shall be responsible for settlement of IBCL transactions sent through the System. The
settlement process involves receiving and authenticating the Electronic Transfer Instructions from
the remitting bank through the System, checking if the remitting bank has sufficient DDA balances,
and posting the debit entry in the remitting banks DDA and the credit entry in the beneficiary
banks DDA through the BSPs FAS. For this purpose, the Participant hereby authorizes the BSP to
execute said debit and credit instructions based on Electronic Transfer Instructions received through
the System.
7.7 The BSP shall be responsible for providing all Participants hourly updates of their respective DDA
balances through account statements sent out via cc:Mail. In this connection, the BSP shall be
responsible for maintaining the cc:Mail server and in granting access to this server to duly authorized
personnel as identified by each participating institution.
7.8 Each Participant shall be solely responsible for ensuring the confidentiality, safety, and security of
its log-in IDs, passwords, and authentication keys for activating the system and initiating IBCL
transactions. If it has reason to believe that the confidentiality or security of its log-in IDs, passwords,
and authentication keys have been compromised, the Participant shall take immediate steps to
have these disabled and changed to new passwords/keys.
7.9 Each Participant shall be legally bound by its Electronic Transfer Instructions which it sent through
the System without need of any other manually prepared confirmation, paper, or instrument,
provided that the same has been authenticated by the BSP and provided further that they comply
with the terms and conditions set forth herein.
7.10 Each Participant shall be responsible for promptly checking the correctness and completeness of
the debit/credit entries of the BSP under the System and to promptly notify the BSP of any errors
discovered.
7.11 Each Participant shall be responsible for reclaiming funds erroneously sent by it through the
System. The BSP and the PCHC shall not be responsible for undertaking the reclaim of funds.
Participants who are recipients of funds erroneously sent shall endeavor to promptly return such
funds upon notice by the sending institution and upon verification that the funds were indeed
erroneously sent. In cases where the recipient of funds was not able to remit the funds back on the
same value date as the erroneous remittance, due compensation shall be paid by the recipient for
the use of funds for the applicable period. Interest rate applicable shall be the average interbank
call loan rate for the period as published.
Such erroneous receipt of funds shall in any case be subject to the provisions of Art. 22 of the Civil
Code of the Philippines.
Appendix 21 - Page 8
APP. 21
01.12.31
7.12. The BAP, being a mere negotiating and signing agent for participating banks, shall not be made a
party to any dispute nor be held answerable for any liability by any transacting parties to IBCL
transactions. Its role is to be a catalyst in framing and structuring this Agreement which aims to
improve the current electronic means of processing IBCL transactions. The PCHC and all
participating banks/financial institutions who formally join the System and avail themselves of the
services provided herein shall have no cause of action or right of relief whatsoever against the
BAP in connection with, arising out of or in relation to, any transactions covered by the Agreement.
The PCHC shall not be held responsible for any loss, liability or damage caused by errors and
mistakes of Participants and shall be held free and harmless from claims, suits, costs, and damages
attributing thereto.
The BSP, as Settlement Bank, shall not be made a party to any dispute nor be held answerable for
any liability by any transacting party to IBCL transactions. The BSP, when acting in accordance
with the provisions of this Agreement, shall be kept free and harmless by all participating banks
and financial institutions for executing and/or effecting settlement/payment instructions, or, as
may be proper, making and implementing reclaiming transactions under par. 7.11 above.
8.0 SETTLEMENT OF DISPUTES AMONG PARTICIPANTS
8.1 Due compensation for errors committed by one or both parties shall be as stipulated in Section VII
of the MART trading guidelines for Interbank Call Loan Transactions. Unresolved disputes involving
participating institutions shall be referred to Voluntary Arbitration. Each party shall propose a
Voluntary Arbitration Committee by listing five (5) names of reputable persons well-versed in the
issue in dispute. Thereafter, the proponent to Voluntary Arbitration shall strike out one name and
the respondent another and so on until only three names are left who shall comprise the Voluntary
Arbitration Committee.
8.2 The decision of the Voluntary Arbitration Committee shall be final and executory in accordance
with law. There shall be no appeal unless the decision is tainted with fraud and/or with apparent
bias in favor of one party.
8.3 The Voluntary Arbitration Law shall apply in a suppletory character.
9.0 REVISIONS TO THE AGREEMENT
9.1 Terms and conditions contained in this Agreement shall be subject to the regulations of the BSP and
the provisions of existing laws of the Republic of the Philippines.
9.2 Procedures, forms, automation programs, hardware specifications, and deadlines referred to herein
may be changed or enhanced subject to mutual agreement in writing among the BSP, the PCHC,
and the BAP. Such changes and enhancements, when executed by the BAP, shall be binding on all
Participants whether BAP member banks or non-member financial institutions.
9.3 Without prejudice to the immediate implementation of this Agreement, the parties herein may
establish such further rules and regulations that may be subsequently be needed to augment,
implement, interpret and govern this Agreement.
Appendix 21 - Page 9
APP. 21
01.12.31
10.0 CONTRACTUAL EFFECTIVITY
This Agreement shall remain valid until terminated by mutual consent of the parties.
11.0 CONFIDENTIALITY The PCHC and the BSP agree to maintain strict confidentiality of all
transactions, data, and/or information provided by, or pertaining to, each Participant under the System.
Violation thereof shall subject the person or persons responsible therefor to the penalty provisions of
Sec. 36 of RA 7653.
IN WITNESS WHEREOF, the parties have hereunto set their hands this 5th day of July, 2001 at the City
of Manila, Philippines.
BANGKO SENTRAL
NG PILIPINAS
BANKERS ASSOCIATION
OF THE PHILIPPINES
By:
By:
ACKNOWLEDGMENT
REPUBLIC OF THE PHILIPPINES)
CITY OF MANILA
) S. S.
BEFORE ME, a Notary Public for and in the City of Manila, Philippines, personally appeared:
Name
known to me and to me known to be the same person who executed the foregoing Agreement for the
Enhanced Interbank Call Loan Funds Transfer System and who acknowledged to me that the same is his
free and voluntary act and deed and that of the institution he represents.
This instrument consists of ______( ) pages including this page whereon the acknowledgment
is written, is duly signed by the parties and their respective instrumental witnesses on each and every
page thereof.
WITNESS MY HAND AND SEAL this 5th day of July in the City of Manila, Philippines.
NOTARY PUBLIC
Doc. No. _____;
Page No. _____;
Book No._____;
Appendix 21 - Page 10
APP. 21
01.12.31
The MIPS2 System shall be open for operation from 10:00 A.M. to 4:00 P.M. for other types of
interbank fund transfer transactions. Remitting/Paying banks shall enter orders through the
Funds Transfer Screen of MIPS2. Each transaction shall be properly identified as to the type of
interbank transaction being settled (e.g. FX Settlement, Securities Settlement).
Appendix 21 - Page 11
APP. 21
01.12.31
2.
Upon receipt of the electronic transfer instructions through the System, these shall be settled with
finality by the BSP through the Participants (as the term is defined in the MIPS2 Agreement)
respective Demand Deposit Account (DDA). These accounting entries shall be passed using the
BSPs Financial Accounting System (FAS).
3.
Debit instructions shall be settled by the BSP on a gross, transaction by transaction, first-in-first out
basis. The FAS timestamp shall be used for FIFO processing and settlement of the electronic
transfer instructions. The PCHC MIPS server timestamp shall be used as the official time of receipt
of the Electronic Transfer Instructions into the System and shall be used to control the cut-off
times.
4.
It is understood that the BSP shall only post debit instructions if the sending participants DDA is
adequately funded. Otherwise, the transaction shall not be posted and shall be held in queue.
5.
If a transaction is held in queue due to inadequate DDA balances, other succeeding transactions
which are of lower value and which are within the available DDA balances shall be posted ahead
of the transaction which was held in queue.
6.
Transactions held in queue shall remain there until adequate funds are received by the DDA to
allow posting.
7.
All electronic fund transfer transactions that remain in queue until 4:00 P.M. shall be automatically
cancelled from the System.
8.
In order to ensure that there is sufficient liquidity in the system and that system gridlock does not
occur, Participants shall submit their transactions at the early hours of operation of the system and not
deliberately hold back payments. For payment of FX transactions, Participants shall transmit at least
70% of their obligations (based on total value) before 12 noon. For payment of securities transactions,
Participants shall transmit at least 50% of their obligations before 2:00 p.m.
9.
The BAP shall monitor these transmission times and shall exert every effort to ensure that these
guidelines are complied with. In this regard, the PCHC shall provide to the BAP daily reports on
the performance of all banks with regards to these rules. Such statistics shall show the proportion
of payment orders (by value) sent in before the relevant times (12 noon for FX settlements and 2
p.m. for securities settlements).
10. Compensation charges for errors in processing/settlement instructions resulting in delayed payment/
settlement of transactions shall be for the account of the party in error and shall be based upon the
existing schedule for computing compensation charges for GS and FX settlements.
11.
In the case of transactions with the BSP, for outright purchase/sale of government securities
whether for investment or liquidity reserves as well as purchase and sale of foreign exchange, the
BSP shall be responsible for crediting directly (in case of sale of securities/foreign exchange to the
BSP)/debiting directly (in case of purchase of securities/foreign exchange from the BSP) the
Participants demand deposit account (DDA) using the BSPs FAS.
Appendix 21 - Page 12
APP. 21
01.12.31
Debits and credits to DDA of Participants resulting from outright purchase and sale of securities/
foreign exchange transactions with the BSP shall be part of the statements of account broadcast
by the BSP on an hourly basis under Section 3.6 of the MIPS 2 Agreement.
All other terms and conditions of the MIPS2 Agreement (hereto attached as Annex) which are not
inconsistent with the provisions of this Supplemental Agreement and not otherwise modified or
superseded thereby shall continue in full force and effect.
IN WITNESS WHEREOF, the parties have hereunto set their hands this 13th day of November
2001 at the City of Manila, Philippines.
BANGKO SENTRAL NG PILIPINAS
By:
By:
________________________________
_______________________________
_____________________
ACKNOWLEDGMENT
REPUBLIC OF THE PHILIPPINES)
CITY OF MANILA
) S. S.
BEFORE ME, a Notary Public for and in the City of Manila, Philippines, personally appeared:
Name
known to me and to me known to be the same person who executed the foregoing Supplemental
Agreement and who acknowledged to me that the same is his free and voluntary act and deed and that
of the institution he represents.
This instrument consists of ______( ) pages including this page whereon the acknowledgment
is written, is duly signed by the parties and their respective instrumental witnesses on each and every
page thereof.
WITNESS MY HAND AND SEAL this ________day of ___________ in the City of
______________, Philippines.
NOTARY PUBLIC
Doc. No. _____;
Page No. _____;
Book No._____;
Series of 2001
Appendix 21 - Page 13
APP. 21
01.12.31
Annex 1
PARTICIPATION AGREEMENT - MIPS2 PLUS
(for BAP Members)
____________________
Bankers Association of the Philippines
11/F Sagittarius Building
H.V. de la Costa St.
Salcedo Village, Makati City
Gentlemen:
Please be advised that we agree to participate in the Interbank Call Loan Funds Transfer System (the
"System") which is covered by the Agreement dated ________________, 2001 (the "Agreement) among
yourselves, the BSP and the PCHC and its subsequent amendments or revisions as may be agreed
upon by the parties thereto from time to time.
We agree to be bound by all the terms and conditions of the Agreement and adopt it as an integral part
of this Participation Agreement, including the authority of the BSP to execute our credit and debit
Electronic Transfer Instructions. Further, we agree to comply with all our obligations as a participating
bank as provided in the Agreement. Lastly, we agree to keep yourselves, the BSP and the PCHC free
and harmless form any claim or liability arising from, or in connection with, our transactions transmitted
through the System in accordance with the provisions of the Agreement.
This participation will become effective apon our conformity hereto and your notification of the same
to us, to the PCHC and the BSP.
Very truly yours,
________________________________
Participating Bank/Financial Institution
APPROVED:
Bankers Association of the Philippines
By:
_________________________________
Appendix 21 - Page 14
APP. 21
01.12.31
Annex 2
PARTICIPATION AGREEMENT - MIPS2 PLUS
(for non-BAP Members)
____________________
Bankers Association of the Philippines
11/F Sagittarius Building
H.V. de la Costa St.
Salcedo Village, Makati City
Philippine Clearing House Corporation
Ground Floor, 5 Storey Bldg.
Bangko Sentral ng Pilipinas
Manila
Gentlemen:
Please be advised that we agree to participate in the Interbank Call Loan Funds Transfer System (the
"System") which is covered by the Agreement dated ________________, 2001 (the "Agreement) among
yourselves, the BSP and the PCHC and its subsequent amendments or revisions as may be agreed upon
by the parties thereto from time to time.
We agree to be bound by all the terms and conditions of the Agreement and adopt it as an integral part
of this Participation Agreement, including the authority of the BSP to execute our credit and debit
Electronic Transfer Instructions. Further, we agree to comply with all our obligations as a participating
bank/financial institution as provided in the Agreement. Lastly, we agree to keep yourselves, and the
BSP free and harmless form any claim or liability arising from, or in connection with, our transactions
transmitted through the System in accordance with the provisions of the Agreement.
This participation will become effective apon our conformity hereto and your notification of the same
to us, and the BSP.
Very truly yours,
________________________________
Participating Bank/Financial Institution
APPROVED:
Bankers Association of the Philippines
By:
_________________________________
By:
___________________________________
Appendix 21 - Page 15
APP. 21a
00.12.31
APP. 21b
01.12.31
Access to the facility - The ILF shall be accessed only within the 10:00 AM to 4:00 PM
trading window of App. 21a. Whenever the reserve deposits of banks/NBQBs are
not sufficient to cover the amount of eligible interbank transaction to be settled, the
Financial Accounting System (FAS) of BSP shall automatically access the unutilized
balance of ILF and move the funds to the Demand Deposit account (DDA) of the
bank/NBQB, up to the amount not exceeding its intraday bank limit.
3.
4.
Primary auction of GS
Secondary trading of GS
Peso netting from $-Peso swap
Lendings/borrowings and their collections/repayments
Intraday bank limit - Banks/NBQBs shall set their individual ILF limits based on the
amount of GS to be delivered to the pool and to be pledged.
APP. 21b
01.12.31
5.
6.
Valuation of collateral - The GS shall be valued based on the 11:15 AM fixing rates
on Friday of the week when pledged documents are submitted to BSP Treasury (from
applicable Bloombergs MART pages).
7.
Margins - Margins shall be applied based on the remaining life of the security and
on existing procedures of BSP Treasury.
8.
9.
Transaction fee In lieu of interest, BSP shall collect a transaction fee of P2,500 per
ILF access to be debited to the DDA account of banks/NBQBs at the close of the
transaction date.
APP. 21b
01.12.31
APP. 21b
01.12.31
FACE AMOUNT
___________________________
Annex A
TIMELINE, POLICIES AND PROCEDURES FOR IMPLEMENTATION OF
INTRADAY LIQUIDITY FACILITY (ILF) TO SUPPORT MIPS 2
Manual of Regulations for Banks
Date
Time
BSP Treasury
Participating Banks/FIs
Bureau of Treasury
BSP Accounting
Not later
than
10:00am
each
Thursday
12:00
noon
each
Friday
Implements instructions
of participating banks/
NBQBs
Settles
interbank
transacrions using available
DDA funds. In case of NSF
conditions, move funds
from ILF
Prints transaction register
APP. 21b
01.12.3 1
Day 1
Time
Participating Banks/FIs
BSP Treasury
11:30 am
4:01 -4:30
pm
Bureau of Treasury
BSP Accounting
4:45-5:00
pm
5:00 pm
5:30-6:15
pm
6:15 pm
Recognizes O/N RP
using the price fixed at
11:15am
Selects securities based
on following criteria and
updates collateral file
(mark)
1. shortest remaining life
2. value less than and
closest to par
APP. 21b
01.12.31
Date
Date
Time
Participating Banks/FIs
BSP Treasury
Bureau of Treasury
BSP Accounting
Repayment of O/N RP
Day 2
10:00 am
to 4:00pm
11:00 am
11:00 am 12:00 nn
APP. 21b
01.12.3 1
APP. 22
02.12.31
DESCRIPTION
GROUP
Palay production
Corn production
Vegetable production, including root and tuber crops
Fruits and nuts (excluding coconut) production
Coconut production, including copra making in the farm
Sugarcane production, including muscovado sugar in
the farm
Fiber crops production
Other agricultural crops production
B. Production of livestock, poultry and other animals
(Division 12)
121
122
123
130
Agricultural services
II. Fishery and Forestry (Major Division 2)
A. Fishery (Division 14)
141
142
143
149
For purposes of identifying the classification of a certain enterprise or undertaking, the industrial groupings in the
1977 Philippine Standard Industrial Classification (PSIC) list shall be followed.
Appendix 22 - Page 1
APP. 22
02.12.31
PSIC
CODE
DESCRIPTION
211
212
213
214
215
216
217
221
222
223
229
Coal mining
Exploration and production of crude petroleum and natural gas
Stone quarrying, clay and sand pits
Other non-metallic mining and quarrying
IV. Manufacturing (Major Division 4)
A. Manufacture of food (Division 31)
311-312
Food manufacturing
B. Textile, wearing apparel and leather industries (Division 32)
321
322
324
Appendix 22 - Page 2
Manufacture of textiles
Manufacture of wearing apparel, except footwear
Manufacture of leather and leather products, leather substitutes,
and fur, except footwear & wearing apparel
Manufacture of footwear, except rubber, plastic or
wood footwear
APP. 22
02.12.31
PSIC
CODE
DESCRIPTION
351
352
353
354
355
356
361
362
363
369
371
372
381
382
383
384
385
386
Appendix 22 - Page 3
APP. 22
02.12.31
PSIC
CODE
DESCRIPTION
411
412
421
422
430
501
502
503
619
61901
711
712
713
Appendix 22 - Page 4
Railway transport
Road passenger and freight transport
Water transport
APP. 22
02.12.31
PSIC
CODE
DESCRIPTION
714
719
Air transport
Services allied to transport
B. Communication (Division 73)
731
732
733
739
951
981
982
Appendix 22 - Page 5
APP. 23
96.12.31
Priority I -
Priority II -
Appendix 23 - Page 1
APP. 23
96.12.31
c. Forestry
(1) Forest nurseries and reforestation
project
2. Mining and quarrying
a. Metal mining
(1) Chromite
(2) Copper
(3) Iron
(4) Lead
(5) Manganese
(6) Mercury and quicksilver
(7) Nickel
(8) Zinc
b. Non-mettalic mining
(1) Asbestos
(2) Sulphur
(3) Coal
(4) Gypsum
3. Manufacturing
a. Basic metal industries
(1) Blast furnaces, steel works
and rolling mills
(2) Iron and steel basic industries
(3) Iron and steel foundries
(4) Non-ferrous metal basic
industries
b. Chemical and chemical products
(1) Basic chemicals
(2) Drugs
(3) Fertilizer
c. Coconut products and their
preparation
(1) Coconut oil, edible
(2) Coconut oil, inedible
(3) Copra meal and cake
Appendix 23 - Page 2
d. Electrical machinery,
apparatus and appliances
(1) Transmissions and
distribution equipment
e. Food manufacturing
(1) Canning and preserving of
fish and other sea foods
(a) Fish canning
(2) Canning and preserving of
fruits and vegetables
(a) Canning, drying, brining,
pickling or otherwise
preserving or preparing
vegetables
(b) Canning, drying or otherwise
preparing and preserving
fruits
(3) Slaughtering, preparation and
preserving of meat
(4) Miscellaneous food
preparation
(a) Prepared feeds for animals
and fowls
f.
Machinery, equipment,
accessories and parts
(1) Agricultural machinery
(2) Engines and turbines
(3) Industrial, construction and
mining machinery
j.
Non-metallic products
(1) Cement
APP. 23
96.12.31
c. Warehousing
d. Water supply and sanitary
services
(1) Irrigation systems
(2) Water supply systems
6. Commerce
a. Export products*
b. Importation of capital goods and
raw materials*
c. Domestic trade (Filipino only)
wholesales and retail
B. Economic activities eligible for credits
up to sixty percent (60%) of the loan value
of the credit instrument **
1. Agriculture, fisheries and forestry
a.
(1)
(2)
(3)
(4)
(5)
Agricultural
Citrus
Cotton
Salt farming
Soybean
Other root crops
Appendix 23 - Page 3
APP. 23
96.12.31
(3)
products
Tin and aluminum ware
i.
Non-metallic products
(1) Glass and glass products
(2) Structural clay products
j.
k. Miscellaneous manufacturing
industries
(1) Cottage native handicraft
industries
(2) Footwear (other than rubber)
(3) Photographic and optical goods
4. Construction
a. Contract
(1) Building construction
(a) Commercial and industrial
projects*
(2) Highway and street construction
(including road building)
5. Public utilities
a.
(1)
(2)
(3)
(4)
b.
(1)
Common carriers
Airlines and other air
transportation
Motor vehicles
Railroad and railway companies
Steamboats and steamship lines
Communication
Telecommunication (cable, mail
and express, telegraph,
telephone)
Appendix 23 - Page 4
APP. 23
96.12.31
c.
(1)
d.
(1)
6.
a.
(1)
b.
(1)
(2)
(3)
c.
(1)
d.
(1)
e.
Services
Business and professional
services
Engineering and technical
services
Educational services
Private vocational and trade
schools
Public universities and higher
educational institutions
Public vocational and trade
schools
Medical and other health
services
Public health services
Recreation services
Theatrical production (i.e., all
performing arts)
Research and scientific
institutions
7. Financial
a.
(1)
(2)
Banks
Private development banks
Rural banks/Cooperative banks
c. Forestry
(1) Forest services
(2) Timber tracts
2. Mining and quarrying
8. Commerce
a.
Export products*
a. Non-metallic mining
(1) Mineral salt
(2) Silica
Appendix 23 - Page 5
APP. 23
96.12.31
3. Manufacturing
a. Apparel and other finished
products made from fabrics and
similar materials
(1) Embroidery shops
(2) Wearing apparel
b. Chemicals and chemical
products
(1) Paints, varnishes and lacquers
(2) Soaps and other cleansing
preparations
c. Coconut products and their
preparations
(1) Copra
d. Electrical machinery, apparatus
and appliances
(1) Electric lamp
(2) Household appliances
(3) Radio, television, telephone
receiving sets, electronic tubes
and components
e. Food manufacturing
(1) Canning and preserving of fish
and other sea foods
(a) Fish sauce (patis) manufacture
(b) Shellfish curing, smoking,
salting or pickling
(2) Cocoa and chocolate and sugar
confectionery
(a) Cocoa and chocolate processing
factories
(3) Grain mill products
(a) Corn mills
(b) Rice mills
(c) Tuber flour mills
(d) Wheat flour
(4) Miscellaneous food preparations
(a) Salt manufacture
Appendix 23 - Page 6
APP. 23
96.12.31
9. Other activities
a. Loans for other dollar-earning
purposes not elsewhere classified
(included in this category are the
construction, development and
operations of first-class hotels
which cater to the needs of the
tourist industry).
C. Economic activities eligible for credits
up to sixty percent (60%) of the loan value
of the credit instrument**
1. Agriculture, Fisheries and Forestry
a. Agricultural
(1) Pineapple
(2) Tobacco, native
b. Fisheries
(1) Fishery services
(2) Pearl fishing and culture, shell
gathering and other marine
products
c. Forestry
(1) Forest services
(2) Timber tracts
2. Mining and quarrying
a. Non-metallic mining
(1) Mineral salt
(2) Silica
3. Manufacturing
a. Apparel and other finished
products made from fabrics and
similar materials
(1) Embroidery shops
Appendix 23 - Page 7
APP. 23
96.12.31
Miscellaneous manufacturing
industries
Oxygen, acetylene and similar
products
Silver and gold work without
precious stones
Musical instruments and parts
Blank recording discs
Metal stampers
a.
(1)
(a)
(b)
(2)
b.
(1)
(2)
Contract
Building construction
Government projects
Commercial and industrial
projects*
Heavy construction (including
bridges and irrigation projects)
Personal
Construction
Reconstruction
5. Public utilities
a. Electricity, gas and steam
(1) Gas manufacture and distribution
(2) Steam heat and power
b. Water supply and sanitary
services
(1) Drainage system
6. Services
a. Medical and other health
services
(1) Private health services
b. Recreation services
(1) Motion picture production
7. Financial
a. Banks
(1) Commercial banks
(2) Savings and mortgage banks
8. Commerce
a. Export products*
b. Importation of capital goods and
raw materials*
c. Domestic trade (Filipino only)
whosale and retail*
4. Construction
Appendix 23 - Page 8
APP. 24
96.12.31
Appendix 24 - Page 1
APP. 24
96.12.31
2.
Composition - The cash which the Principal has delivered to the Investment
Manager as well as such securities in which said sums are invested, the proceeds, interest,
dividends and income or profits realized from the management, investment and reinvestment
thereof, shall constitute the managed funds and shall hereafter be designated and referred to
as the Portfolio. For purposes of this Agreement, the term securities shall be deemed to
include commercial papers, shares of stock and other financial instruments.
3.
Delivery of Additional Funds - At any time hereafter and from time to time at
the discretion of the Principal, the latter may deliver additional funds to the Investment
Manager who shall form part of the Portfolio and shall be subject to the same terms and
conditions of this Agreement. No formalities other than a letter from the principal and physical
delivery to the Investment Manager of cash will be required for any addition to the Portfolio.
Nature of Agreement - THIS AGREEMENT IS AN AGENCY AND NOT A TRUST
4.
AGREEMENT. AS SUCH, THE CLIENT SHALL AT ALL TIMES RETAIN LEGAL TITLE TO
FUNDS AND PROPERTIES SUBJECT OF THIS ARRANGEMENT.
THIS AGREEMENT IS FOR FINANCIAL RETURN AND FOR THE APPRECIATION
OF ASSETS OF THE ACCOUNT. THIS AGREEMENT DOES NOT GUARANTEE A YIELD,
RETURN OR INCOME BY THE INVESTMENT MANAGER. AS SUCH, PAST PERFORMANCE
OF THE ACCOUNT IS NOT A GUARANTY OF FUTURE PERFORMANCE AND THE INCOME
OF INVESTMENTS CAN FALL AS WELL AS RISE DEPENDING ON PREVAILING MARKET
CONDITIONS.
IT IS UNDERSTOOD THAT THIS INVESTMENT MANAGEMENT AGREEMENT IS
NOT COVERED BY THE PHILIPPINE DEPOSIT INSURANCE CORPORATION (PDIC) AND
THAT LOSSES, IF ANY, SHALL BE FOR THE ACCOUNT OF THE PRINCIPAL.
POWERS
5.
Powers of the Investment Manager - The Investment Manager is hereby
conferred the following powers:
a.
Appendix 24 - Page 2
APP. 24
96.12.31
c.
d.
e.
To collect and receive matured securities, dividends, profits, interest and all
other sums accruing to or due to the Portfolio;
f.
g.
To pay out of the Portfolio all costs, charges and expenses incurred in connection
with the investments or the administration and management of the Portfolio
including the compensation of the Investment Manager for its services relative
to the Portfolio; and
h.
To perform such other acts or make, execute and deliver all instruments
necessary or proper for the exercise of any of the powers conferred herein, or
to accomplish any of the purposes hereof.
LIABILITY OF INVESTMENT MANAGER
Exemption from Liability - In the absence of fraud, bad faith, or gross or willful
6.
negligence on the part of the Investment Manager or any person acting in its behalf, the
Investment Manager shall not be liable for any loss or damage to the Portfolio arising out of or
in connection with any act done or performed or caused to be done or performed by the
Investment Manager pursuant to the terms and conditions herein agreed, to carry out the
powers, duties and purposes for which this Agreement is executed.
Appendix 24 - Page 3
APP. 24
96.12.31
7.
Advice of Counsel - The Investment Manager may seek the advice of lawyers.
Any action taken or suffered in good faith by the Investment Manager as a consequence of
the opinion of the said lawyers shall be conclusive and binding upon the Principal, and the
Investment Manager shall be fully protected from any liability suffered or caused to be suffered
by the Principal by virtue hereof.
ACCOUNTING AND REPORTING
8.
The Investment Manager shall keep and maintain books of accounts and other
accounting records as required by law. The Principal or the authorized representative of the
Principal shall have access to and may inspect such books of accounts and all other records
related to the Portfolio, including the securities held in custody by the Investment Manager
for the Portfolio.
Reporting Requirements - The Investment Manager shall prepare and submit
9.
to the Principal the following reports within ______________________________: (a) Balance
Sheet; (b) Income Statement; (c) Schedule of Earning Assets; (d) Investment Activity Report;
and (e) (such other reports as may be required by the Principal).
INVESTMENT MANAGERS FEE
10.
Investment Fee - The Investment Manager, in addition to the reimbursement
of its expenses and disbursements in the administration and management of the Portfolio
including counsel fees, shall be entitled to receive as compensation for its services a
management fee of
(Specify amount or rate)
.
WITHDRAWALS FROM THE PORTFOLIO
11.
Withdrawal of Income/Principal - Subject to availability of funds and the nondiminution of the Portfolio below P1 million, the Principal may withdraw the income/principal
of the Portfolio or portion thereof upon written instruction or order given to the Investment
Manager. The Investment Manager shall not be required to see as to the application of the
income/principal so withdrawn from the Portfolio. Any income of the Portfolio not withdrawn
shall be accumulated and added to the principal of the Portfolio for further investment and
reinvestment.
Non-alienation of Encumbrance of the Portfolio or Income - During the
12.
effectivity of this Agreement, the Principal shall not assign or encumber the Portfolio or its
income or any portion thereof in any manner whatsoever to any person without the prior
written consent of the Investment Manager.
Appendix 24 - Page 4
APP. 24
96.12.31
__________________________
(PRINCIPAL)
___________________________
(INVESTMENT MANAGER)
By:
____________________________
Appendix 24 - Page 5
APP. 25
96.12.31
I.
Foreword
These guidelines, which are based on the "Risk Management Guidelines For
Derivatives" issued by the Basle Committee on Banking Supervision in July 1994, are
expected to facilitate the further development of a prudent approach to the risk
management of derivatives.
The Bangko Sentral recognizes that sound internal risk management is essential
to the prudent operations of financial institutions and that supervisory tools, such as
capital requirements, are not by themselves sufficient. Sound internal risk management
is also essential to promoting stability in the financial system as a whole.
While the precise applicability of these guidelines will depend on the size and
complexity of an institution's derivatives activities, we believe that the application of
the basic principles embodied therein are relevant even for risks inherent in more
traditional activities.
II.
Appendix 25 - Page 1
APP. 25
96.12.31
Participants in the derivatives markets are generally grouped into two categories
based primarily on their motivations for entering into derivatives contracts.
End-users typically enter into derivatives activities to achieve specified objectives
related to hedging, financing or position-taking on the normal course of their
business operations. A wide variety of business enterprises are end-users. They
include, but are not limited to, a broad range of financial institutions such as
banks, securities firms and insurance companies; funds and specialized
investment partnership; and corporations, local and state governments,
government agencies and international agencies.
4.
5.
The basic risks associated with derivatives activities are not new to banking
organizations. In general, these risks are credit risks, market risk, liquidity risk,
operations risk and legal risk. Because they facilitate the specific identification
and management of these risks, derivatives have the potential to enhance the
safety and soundness of financial institutions and to produce a more efficient
allocation of financial risks. However, since derivatives also have these basic
risks in combinations that can be quite complex, they can also threaten the
safety and soundness of institutions if they are not clearly understood and
properly managed.
6.
Appendix 25 - Page 2
APP. 25
96.12.31
III.
3.
4.
5.
6.
7.
8.
9.
10.
11.
A.
B.
Appendix 25 - Page 3
APP. 25
96.12.31
2.
3.
C.
IV.
Appendix 25 - Page 4
APP. 25
96.12.31
A.
Risk Measurement
1.
Risk should be measured and aggregated across trading
and non-trading activities on an institution-wide basis
to the fullest extent possible. In derivatives activities,
assessment of the following risks should be included:
credit risk, market risk, liquidity risk, operations risk and
legal risk (Section VI of these Guidelines).
2.
Risk measurement procedures should be understood by
all relevant personnel - form individual traders to the
Board of Directors.
3.
Mark-to-Market valuation of derivatives position is
fundamental to measuringand reporting exposures
accurately and on a timely basis. A daily report to
management indicating the gain or loss on derivatives
activities should be submitted. Monitoring of credit
exposures, trading positions and market improvements
should be done at least daily.
4.
Sound risk measurement practices include analysis of
stress situations and identification of changes in market
behavior that could have unfavorable effects on the
institution and assessment of the ability of the institution
to withstand them.
B.
Limiting Risks
1.
A sound system of integrated institution-wide limits
should set boundaries for organization risk-taking and
should ensure that position which exceeds predetermined levels receive prompt management
attention. Such a system should define, among others,
the following limits:
a.
2.
C.
Reporting
An accurate, informative and timely reporting system
to the appropriate level of management is essential to the
prudent operation of derivatives activities. Top management
Appendix 25 - Page 5
APP. 25
96.12.31
V.
Appendix 25 - Page 6
APP. 25
96.12.31
a.
4.
5.
VI.
Appendix 25 - Page 7
APP. 25
96.12.31
Settlement Risk
This is the risk that an institution faces when it
has performed its obligations under a contract, but has
not yet received value from its counterparty.
Management should establish limits and monitoring
procedures for settlement risk exposures. Settlement
Appendix 25 - Page 8
APP. 25
96.12.31
2.
B.
Market Risk - is the risk that adverse movements in the level or volatility
of market prices will affect the institution's financial condition.
Dealers and Active Position-Takers
1.
There should be a risk measurement system that can
quantify risk exposures arising from changes in market
factors. This system should be structured to enable
management to initiate prompt remedial action,
facilitate stress testing, and assess the potential impact
of various changes in market factors on earnings and
capital. At a minimum, all risk measurement applications
and models should be reviewed and validated annually,
and management should maintain adequate
documentation to support the reliability of the validation
process.
2.
Statistical analyses should be used to characterize
market scenarios and price behavior. Before they are
used, and whenever market conditions change
significantly, the analyses should be validated by a
source independent of the trading desk or risk
assumption unit.
Limited End-Users
The senior management should ensure that all
significant risks arising from their derivatives activities
Appendix 25 - Page 9
APP. 25
96.12.31
Liquidity Risk - is the risk that an institution will not be able to,
or cannot easily, exit or unwind its position at a desired market
price (market/product liquidity risk); or to meet its cash flow
obligations as they fall due or upon margin calls (cash flow/
funding liquidity risk).
1.
2.
3.
Dynamic hedging refers generally to the continuous process of buying and selling of instruments to
offset open exposures as market conditions change (e.g. an option writer selling an underlying asset as
its price falls).
Appendix 25 - Page 10
APP. 25
96.12.31
2.
3.
4.
Appendix 25 - Page 11
APP. 25
96.12.31
Legal Risk - is the risk that contracts are not legally enforceable or
correctly documented.
1.
2.
3.
Appendix 25 - Page 12
APP. 26
96.12.31
Appendix 26 - Page 1
APP. 27
96.12.31
b.
2.
(b)
(2)
Appendix 27 - Page 1
APP. 27
96.12.31
(3)
3.
c.
i)
ii)
Appendix 27 - Page 2
APP. 28
96.12.31
CLEARING PROCEDURES
(Appendix to Sec. X603)
a. Clearing regulations in general.
(1) Time and place of exchanges. The
clearing of checks, bills and other demand
items herein contemplated shall be
conducted in the BSP-designated clearing
centers. The hour for making such exchanges
shall be at 4:00 p.m. on each business day
as well as on all local holidays in the clearing
centers and/or at such other times as may be
fixed by the BSP.
(2) Settling clerks. The head office of
each bank, together with all its branches
within the designated clearing areas, shall
be considered as a unit and shall be
represented by one (1) or more [but not
exceeding six(6)] competent clerks/
representatives to deliver and receive the
items to be exchanged. The facsimile
signatures and NBI clearances of these clerks/
representatives shall be submitted to the
Accounting Department. All settling clerks/
representatives shall be issued their
respective ID cards which shall be presented
for admission in the clearing office or regional
units.
(3) Items for clearing. All checks and
documents payable on demand and drawn
against a bank/branch allowed to clear may
be exchanged through clearing centers
designated by the BSP. As evidence of the
channel through which they were negotiated,
all items to be exchanged shall be properly
endorsed and guaranteed before being sent
to the Clearing Office/Unit and shall bear the
name of the bank/branch, institution or entity
to which they belong. Likewise, they shall
be impressed by the sending bank/branch,
institution or entity with a special stamp to
the effect that they have been cleared through
the clearing facilities of the BSP. The Clearing
Office/Unit of the BSP shall in no way be
responsible for any flaw or defect in the items
Appendix 28 - Page 1
APP. 28
96.12.31
Appendix 28 - Page 2
APP. 28
96.12.31
Color
Brown
Pink
Orange
Black
Color
Green
White
Blue
Red
Violet
Royal Blue
Gray
Appendix 28 - Page 3
APP. 28
96.12.31
Appendix 28 - Page 4
APP. 28
96.12.31
Appendix 28 - Page 5
APP. 28
96.12.31
Appendix 28 - Page 6
APP. 28
96.12.31
Appendix 28 - Page 7
APP. 28(a)
96.12.31
In Tarlac
4:00 P.M. - Tarlac banks deliver On
Manila checks and dishonored On Tarlac checks
picked up at 4:00 P.M. of
the previous day.
- Tarlac banks pick up On
Tarlac checks and returned
On
Manila
checks
delivered at 4:00 P.M. at
Manila the previous day.
APP. 29
99.12.31
Appendix 29 - Page 1
APP. 30
98.12.31
PRESCRIBED FORMAT
MEMORANDUM OF UNDERSTANDING
(Appendix to Subsec. X106.3)
(Name of Bank)
and the Bangko Sentral ng Pilipinas (BSP) wish
to protect the interest of the depositors, creditors, shareholders and the public in general and
toward that end, wish the Bank to operate safely and soundly and in accordance with all
applicable banking laws, rules and regulations.
In consideration of the above premise, the BSP, through its authorized deputies, and
the Bank, by and through its duly elected Board of Directors (Board), do hereby agree
that the Bank shall at all times operate in compliance with the articles of this Memorandum of
Understanding.
ACTION PLAN
Within thirty (30) days, the Board shall adopt and implement a capital restoration plan
detailing the Boards perception of what needs to be done to improve the Banks capital
position, specifying how the Board will implement the plan and setting forth a timetable for
the implementation of the plan.
Upon completion of the plan, the Bank shall submit the plan to the appropriate
supervising and examining department of the BSP for review. The Board shall establish
appropriate procedures for the implementation of the plan.
In the event the BSP recommends changes to the action plan, the Board shall
immediately incorporate those changes into the plan.
The plan shall be implemented pursuant to the time frames set forth within the plan
unless events dictate modifications to the plan are required. Where the Board considers
modifications appropriate, those modifications shall be submitted to the BSP for approval.
CAPITAL PROGRAM
The Bank shall achieve by
(date)
and thereafter maintain the following
capital levels:
a. At least equal to ten percent (10%) of its risk assets;
b. At least equal to the following amounts (in million pesos):
Existing
Requirements
Expanded KBs
Non-Expanded KBs
3,500
1,625
Compliance Period_____
12/24/98 12/31/99 12/31/2000
4,500
2,000
4,950
2,400
5,400
2,800
Appendix 30 - Page 1
APP. 30
98.12.31
Existing
Compliance Period______
Requirements 12/24/98
12/31/99 12/31/2000
Thrift Banks
Within Metro Manila
Outside Metro Manila
Rural Banks
Within Metro Manila
Cities of Cebu & Davao
1st/2nd/3rd class cities &
1st class municipalities
4th/5th/6th class cities & 2nd/
3rd/4th class municipalities
5th/6th class municipalities
200
40
250
40
325
52
400
64
20
10
20
10
26
13
32
16
6.5
3
2
3
2
3.9
2.6
4.8
3.2
Within thirty (30) days, the Board shall develop a three (3)-year capital build-up program.
The program shall include, as may be necessary:
(a) Specific plans for the maintenance of adequate capital that should not be less than
the requirements stated above;
(b) Projections for growth and capital requirements based upon a detailed analysis of
the Banks assets, liabilities, earnings, fixed assets and off-balance sheet activities;
(c) Projections of sources and timing of additional capital to meet the Banks current
and future needs;
(d) The primary source(s) from which the Bank will strengthen its capital structure to
meet the Banks needs; and
(e) Contingency plans that identify alternative methods should the primary source(s) be
not available.
COMPLIANCE/PROGRESS REPORTS
The Compliance Officer shall be responsible for monitoring and coordinating the Banks
adherence to the provisions of this Memorandum of Understanding. The Compliance Officer
shall submit a written progress report to the Board on a (Monthly/Quarterly) basis setting
forth in detail:
a. Actions taken to comply with each article of this Memorandum; and
b. The results of those actions
The Board shall submit (monthly/quarterly) progress reports to the appropriate
supervising and examining department of the BSP containing the abovementioned details.
FORMAL AGREEMENT
Although the Board has by this Memorandum of Understanding consented to submit
certain proposed actions and programs for the review and approval of the BSP, the Board
has the ultimate responsibility for proper and sound management of the Bank.
Appendix 30 - Page 2
APP. 30
98.12.31
It is expressly and clearly understood that if, at any time, BSP deems it appropriate in
fulfilling the responsibilities placed upon him by laws of the Republic of the Philippines to
undertake any action affecting the Bank, nothing in this Memorandum of Understanding
shall in any way inhibit, estop, bar, or otherwise prevent him from so doing.
Any time requirements specified in this Memorandum of Understanding shall begin
from the effective date of this Memorandum. Such time requirements may be extended by
the BSP for good cause upon written application of the Board.
This Memorandum of Understanding shall be effective upon execution by the parties
hereto, and its provisions shall continue in full force and effect until such time as they shall
be amended by mutual consent of the parties to this Memorandum or excepted, waived,
terminated by BSP.
IN TESTIMONY WHEREOF, the undersigned has hereunto set his hand this_______
day of __________ at the City of _______________, Philippines.
BANGKO SENTRAL NG PILIPINAS
_________________________
Authorized Deputy
________________________
Deputy Governor-SES
BANK
__________________________
President
_________________________
Chairman of the Board
_________________________
( Witness )
_________________________
( Witness )
Appendix 30 - Page 3
APP. 31
98.12.31
TBs migrating from NOW and conduit arrangements and RB members of the Philippine
Clearing House Corporation (PCHC) shall secure a Bank Routing Symbol Transit Number
(BRSTN) with PCHC.
b.
TBs and RB members shall secure prior authority to participate directly in the PCHC and
BSP clearing operations with the Department of Thrift Banks and Non-Bank Financial
Institutions (DTBNBFI) and the Department of Rural Banks (DRB), BSP, respectively.
Sec. 2. Requirements for Thrift Banks and Rural Banks Who are Members of PCHC
TBs/RBs participating directly in the clearing operations of PCHC and BSP Regional
Clearing Centers shall apply for collateralized overnight clearing line under Items "c"
and "d" of Sections 2205 and 3205 of the Manual. Said banks shall enter into an agreement
with the BSP conforming to these guidelines and they shall in turn enter into similar agreements
with their clients.
Sec. 3. Application for Overnight Clearing Line
a.
The applicant-bank shall submit to the Department of Loans and Credit (DLC) a duly
accomplished Agreement form on a continuing loan line, together with a resolution of
the board of directors of the applicant bank authorizing the bank to apply for such loan
line and designating the officers authorized to negotiate and sign pertinent papers thereto.
The Agreement must be fully registered and annotated on the collateral Torrens Certificate
of Title/Condominium Certificate of Title.
b.
The loan line, once approved, can be amended at the instance of the applicant bank
only once every twelve (12) months. The loan line shall be equal to at least five
percent (5%) of the banks deposit liabilities as at end of prior month.
c.
Unencumbered real estate properties duly registered in the name of the applicant
bank or its stockholder. The submitted collaterals may be given a loan value of
seventy percent (70%) based on the appraised value as determined by reputable
independent appraisers.
Appendix 31 - Page 1
APP. 31
98.12.31
(2)
Foreclosed real properties still within the redemption period. The loan value shall
be eighty percent (80%) of the amount of the Certificate of Sale as annotated on the
Certificate of Title. If the property is redeemed, the line will be reduced accordingly
until the line can be amended at its annual review.
(3)
Current mortgage credits secured by real estate mortgage (REM) with remaining
maturities of not less than one (1) year from date of assignment. The loan value
shall be eighty percent (80%) of the outstanding balance of the loan at the time of
assignment to BSP.
(4)
Government securities for a loan value of eighty percent (80%) of the maturity
value.
(5)
d.
The Bank shall be allowed the flexibility of changing or substituting collateral, specially
matured government securities.
e.
The availments against the approved loan line shall bear interest at the ninety-one (91)day Treasury Bill rate of the last auction immediately preceding the availments.
The electronic notice of application of the loan line to settle net clearing losses from the
BSP Accounting Department shall constitute availment. Upon receipt of the electronic
notice of availment, DLC shall immediately post the transaction to the banks loan ledger.
b.
Each availment shall be fully paid through an automatic debit to the demand deposit
account of the bank with BSP on the next clearing day, without need of demand.
c.
Availments that remain unpaid on the next clearing day shall be subject to three percent
(3%) per month in liquidated damages.
Appendix 31 - Page 2
APP. 31
98.12.31
Session
Value/Settlement Date
Returned Items
On date of return
Outward Items
Local Clearing
Inter-Regional Clearing
Regular exchanges shall be conducted daily for local, inter-regional and out-of-town and
outward Manila on regular banking days and local holidays.
b.
Returned Items shall be contained in special red envelopes and presented separately in
the clearing statements.
c.
The net clearing demands of banks shall be debited/credited to the demand deposit
accounts on value date as defined in Sec. 5 above.
d.
The participating banks in BSP Regional Clearing Centers shall prepare their electronic
clearing statements following the procedures contained in the BSP Clearing Operations
User Manual for Participating Banks.
e.
Manila outward regional clearing demands bound for BSP Regional Clearing Centers
and On Manila outward clearing demands shall be presented to PCHC in accordance
with the existing PCHC prescribed clearing rules.
f.
BSP Regional Clearing Centers shall consolidate clearing statements and transmit back
electronically to the participating banks the consolidated clearing statement for each
bank. The hard copy of the consolidated clearing statements signed by responsible
officials of the participating banks shall be submitted to the BSP Regional Clearing Center
on the next clearing day.
Appendix 31 - Page 3
APP. 31
98.12.31
g. Participating banks shall present the demand items in sealed envelopes, segregating
the demand items according to regional clearing centers. Each envelope shall show
the number and the total value of the checks presented. The duly authorized settling
representatives of the participating banks shall sign on the BSP control copy of the
consolidated clearing statements to document the exchanges.
Sec. 7. Procedures for Settling Losses
Clearing losses shall be settled to the extent of the combined amount of the demand
deposit balance and additional funds obtained from the following credit sources of the
participating bank:
a.
b.
c.
Procedures for unwinding clearing transactions shall apply to all inward items, other
than Returned Items, and to local exchanges only.
b.
The aggregate values of all inward items of all clearing centers, including On Manila
inward clearing demands presented to PCHC, shall be ranked from highest to lowest.
The unsettled net clearing losses shall be eliminated by unwinding the inward items
starting from the clearing centers, including PCHC, with highest aggregate value.
c.
In case the aggregate value of the inward items for a given clearing center, except
PCHC, exceeds the unsettled net clearing losses, the total inward items for that clearing
center shall be the subject of unwinding.
d.
In the case of checks cleared through PCHC, the inward clearing items shall be unwound
to the extent of the unsettled net clearing loss. The selection of the specific demand
items to be covered by unwinding shall be based on PCHC rules.
e.
Checks which are the subject of the unwound clearing transactions shall be returned to
the presenting banks not later than 9:00 oclock A.M. of the following clearing day.
Appendix 31 - Page 4
APP. 31
98.12.31
Appendix 31 - Page 5
APP. 32
98.12.31
A.
When the loan is obtained from a bank that is a subsidiary of a holding company of
which both the borrowers bank and the lending bank are subsidiaries.
X
Holding Company
Y Bank
(Subsidiary)
Z Bank
(Subsidiary)
Lending Bank
Thus, if Mr. A, who is a director of Z Bank borrows from Y Bank, he should waive the
secrecy of deposits of whatever nature in all banks in the Philippines since both Y Bank and Z
bank are subsidiaries of X Holding Company.
Appendix 32 - Page 1
APP. 32
98.12.31
B.
When the loan is from a bank in which a controlling proportion of the shares is owned
by the same interest that owns a controlling proportion of the shares of his bank.
Lending banks Equity Structure
Bank Y
O w n er B
49%
O w ner A
51%
Bank Z
Owner B
49%
Owner A
51%
In illustration above, the controlling shares in both banks belong to the same interest,
Owner A.
Appendix 32 - Page 2
APP. 33
99.12.31
Appendix 33 - Page 1
APP. 33
99.12.31
c. Available for Sale Securities (ASS) These are debt securities purchased and held
indefinitely, i.e., neither held to maturity nor
for trading purposes, where the financial
institution anticipates that the securities will
be available to be sold in response to
liquidity needs and/or to reduction in legal
reserves, liquidity reserves, liquidity floor,
security deposits and/or allowable
alternative investments.
The daily valuations for these securities
are, like TAS, at fair market values to
account for both upward and downward
market movements. However, unrealized
gains or losses shall be excluded from
reported earnings and reported as a separate
component of stockholders equity until
realized.
Appendix 33 - Page 2
APP. 33
99.12.31
Appendix 33 - Page 3
APP. 33a
00.12.31
2. Traded Abroad
APP. 33a
00.12.31
Type of Security
3. Brady Bonds
Same as B.2.
Same as B.2.
5. Other foreign-currency
securities
Same as B.2.
2. Long-term Domestic
Government Securities
Same as C.1.
____________________
* Based on done rates if available. If done rates are not available, use the mid rate between bid and
offer. If no mid rates are available, use the bid rate.
APP. 33a
00.12.31
1. Short-term securities
Prices computed using the corresponding government security benchmark + short-term risk premium
Prices computed using the corresponding government security benchmark + long-term risk premium
Prices computed using the corresponding government security benchmark based on the reset period
+ risk premium. (Please refer to Technical Annex
for pricing formula.)
All the risk premia mentioned under Section D shall be recommended by a Risk Assessment Committee (RAC) and updated regularly. The RAC shall be convened by the Bankers
Association of the Philippines (BAP) and composed of representatives from the BAP, Investment House Association of the Philippines (IHAP), Money Market Association of the Philippines (MART), rating agencies and the BSP.
Other Guidelines
In pricing debt securities, interpolated yields shall be used for securities with odd
tenors.
The mark-to-market rules prescribed for securities from Sections A to C (Equity Securities
Listed in the Stock Exchange, Foreign Currency-Denominated Debt Securities Quoted in
Major Information Systems and Peso-Denominated Government Securities) shall take effect on
April 1, 2001. The effectivity date of the mark-to-market rules prescribed for securities covered
under Section D (Peso-Denominated Private Debt Securities) shall be announced later.
APP. 33a
00.12.31
Technical Annex:
Valuation of Floaters Formula:
n
C1______ + ____________C____________ + _______ MV ____________ - MVxCpn x (1-Wht) x A
Net price =
[1+Yld x (1-Wht) DSC/E n-2[1 + Yld x (1-Wht) n-1+DSC/E (1 +Yld x (1-Wht) N-1+DSC/E
360
F
F
F
Known Flow
Unknown Flows
Principal
Accrued
Where:
C1
E
A
DSC
F
N
C
MV
Cpn
Yld
Wht
APP. 34
98.12.31
Accounting
Appendix 34 - Page 1
APP. 34
98.12.31
Appendix 34 - Page 2
APP. 34
98.12.31
Appendix 34 - Page 3
APP. 34
98.12.31
Appendix 34 - Page 4
APP. 34
98.12.31
Appendix 34 - Page 5
APP. 34
98.12.31
Appendix 34 - Page 6
APP. 34
98.12.31
Annex 1
SUPERVISION AND EXAMINATION SECTOR
(Date)
______________________
Treasurer of the Philippines
Bureau of Treasury
Palacio del Gobernador
Intramuros, Manila
Attention:
Dear ________________________:
The Supervision and Examination Sector of the Bangko Sentral ng Pilipinas (BSP-SES)
hereby makes an application to open a Principal Securities Account in the Registry of Scripless
Securities (RoSS) for the purpose of holding the security deposit for the faithful performance of
trust duties of institutions engaged in trust business pursuant to Section 65 of R.A. No. 337,
as amended.
We understand that the Bureau of Treasury shall maintain the Principal Securities
Account of BSP-SES for free.
Very truly yours,
______________________
Deputy Governor
Appendix 34 - Page 7
APP. 34
98.12.31
Annex 1-A
SUPERVISION AND EXAMINATION SECTOR
(Date)
______________________
Treasurer of the Philippines
Bureau of Treasury
Palacio del Gobernador
Intramuros, Manila
Attention:
2. ______________________________
_________________________________
_________________________________
______________________________
We understand that the Bureau of Treasury will maintain the Client Securities Account
for P1,000 per month per account.
Very truly yours,
___________________________
Authorized Signatory
Appendix 34 - Page 8
APP. 34
98.12.31
Annex 2-A
To be used by a trust institution with own demand deposit account with BSP-Accounting
Letterhead of Trust Institution
AUTODEBIT/AUTOCREDIT AUTHORIZATION
The
(name of bank)
hereby authorizes the Bureau of Treasury
(BTr) and the Bangko Sentral ng Pilipinas (BSP) to debit/credit our demand deposit account
with BSP-Accounting for coupons/interest payment of our securities in the BSP-SES RoSS
accounts; and to settle the payment of monthly maintenance fees to BTr of our client securities
account under the BSP-SES RoSS account. We also authorize the BTr and the BSP to credit
the Account of BSP-SES with BSP-Accounting for the redemption proceeds of our securities in
the event such securities mature while in the RoSS account of BSP-SES.
This authorization will take effect on
(indicate date)
____________________________
(Authorized Signatory)
Appendix 34 - Page 9
APP. 34
98.12.31
Annex 2-B
To be used by a trust institution with settlement arrangement with a bank
Letterhead of Trust Institution
AUTO DEBIT/AUTOCREDIT AUTHORIZATION
The
(name of settlement bank)
for the account of
(name of trust
institution)
hereby authorizes the Bureau of Treasury (BTr) and the Bangko Sentral ng
Pilipinas (BSP) to debit/credit our demand deposit account with BSP-Accounting for coupons/
interest payment of securities of the trust institution in the BSP-SES RoSS accounts; for maturing
securities of the trust institution held in our RoSS Principal Securities Account with BTr; and
to settle the payment of monthly maintenance fees to BTr of our client securities account
under the BSP-SES RoSS account.
The
(name of trust institution)
also authorizes the BTr and the BSP to credit the
Account of BSP-SES with BSP-Accounting for the redemption proceeds of our securities in
the event such securities mature while in the RoSS account of BSP-SES.
This authorization will take effect on
(indicate date)
___________________________________
(Authorized Signatory of Settlement Bank)
___________________________________
(Authorized Signatory of Trust Institution)
Appendix 34 - Page 10
APP. 34
98.12.31
Annex 3
Letterhead of Trust Institution
Date:
The Director
DCB I/DCB II/DTBNBFI
Bangko Sentral ng Pilipinas
A. Mabini St., Manila
Dear Sir:
We are transferring on (indicate date of transfer) the following securities to your Principal
Securities Account and our Client Securities Account (sub-account) as our security deposit
for the faithful performance of trust duties pursuant to Section 65 of R.A. No. 337, as amended.
Type
ISIN
Purchase
Date
Issue
Date
Due
Date
Remaining
Tenor a/
ISIN
Purchase
Date
Issue
Date
Due
Date
Remaining
Tenor a/
Face
Amount
(date)
Face
Amount
Purchase
Price
.
Purchase
Price
Appendix 34 - Page 11
APP. 34
98.12.31
Annex 4
Letterhead of Trust Institution
Date:
The Director
DCB I/DCB II/DTBNBFI
Bangko Sentral ng Pilipinas
A. Mabini St., Manila
Dear Sir:
We wish to withdraw on (indicate date of transfer)
the following securities used as
security deposit for the faithful performance of trust duties from the Principal Securities Account
and from our corresponding Client Securities Account (sub-account).
Type
ISIN
Purchase
Date
Issue
Date
Due
Date
Remaining
Tenor a/
Face
Amount
Purchase
Price
Appendix 34 - Page 12
APP. 34
98.12.31
Annex 5
MEMORANDUM
DCB I/DCB II/DTBNBFI
For
The Director
Supervisory Reports and Studies Office
From
The Director
Subject :
Date
ISIN
Purchase
Date
Issue
Date
Due
Date
Remaining
Tenor a/
Face
Amount
Purchase
Price
Appendix 34 - Page 13
APP. 34
98.12.31
Annex 6
DCB I/DCB II/DTBNBFI
(Date)
-----------------------------------
Appendix 34 - Page 14
APP. 34
98.12.31
Annex 7
MEMORANDUM
DCB I/DCB II/DTBNBFI
For
The Director
Accounting Department
From
The Director
Date
Subject :
You are hereby instructed to debit our deposit account in the amount of P ___________ and
to credit said amount to the demand deposit account of (indicate name of trust institution or,
where applicable, the name of its settlement bank).
The trust institution has transferred RoSS securities to the Principal Securities Account of
BSP-SES to replace the matured securities.
____________________________
Authorized Signatory
Appendix 34 - Page 15
APP. 35
98.12.31
The Director
Cash Department
Bangko Sentral ng Pilipinas
Vito Cruz, Cor. Mabini, Manila
Sir:
Attached is _______________________________
(Bank)
in the amount of P _____________ as payment for:
1. LEGAL RESERVE
2. CB:IBRD LOAN/LC:STD
BORROWERS NAME
___________________
___________________
___________________
___________________
Total
_______________
_____________
(Check/DD/CC)
_________
Number
AMOUNT
____________
PRINCIPAL
_________
_________
_________
_________
_________
INTEREST
________
________
________
________
________
PENALTY
________
________
________
________
________
____________
Excess/deficiency will be credited/debited to the bank's Demand Deposit account with BSP.
3. CASH DIVIDENDS ON PREFERRED SHARES
YEAR
______
______
5. SUPERVISORY FEES
6. FINES/PENALTIES
NATURE
a) Late reporting
b) Reserve deficiency
c) SBL
d) Others (Specify)
YEAR
______
______
PERIOD COVERED
___________
___________
___________
___________
TOTAL
AMOUNT
___________
___________
_____________
AMOUNT
___________
___________
_____________
AMOUNT
___________
___________
_____________
AMOUNT
___________
___________
___________
___________
_____________
_____________________________
Signature Over Printed Name
____________________________
Position
Appendix 35 - Page 1
APP. 36
99.12.31
PROJECT
A. Crops
Abaca
Blackpepper
Cacao
Calamansi
Cashew
Coconut
Coffee
Durian
Lanzones
Mango
Mangosteen
Pomelo
Rambutan
Rubber
Palm Oil
Pili
Jackfruit
Others a
B. Livestock
C. Poultry
D. Fisheries
Note:
GESTATION
(Years)
4-6
3-4
4-6
4-6
5
7-8
3-4
5-7
6-8
5-7
6-7
5-7
4-6
6-8
5-7
7
5-7
SUGGESTED
MAXIMUM
GRACE PERIOD
(Years)
5
4
5
6
5
7
4
7
7
7
7
7
5
7
7
7
7
will depend on the cash
flow or type of project, up
to a maximum of seven
(7) years
Cash Flows/Cost and Return Analysis for these projects are available at the Agribusiness and
Marketing Assistance Service, Department of Agriculture.
Others - other crops/projects as may be determined by the Department of Agriculture through the Agricultural
Credit Policy Council which may include industrial tree crops planted in private lands and used for intercropping
purposes.
Appendix 36 - Page 1
APP. 37
98.12.31
A. GUIDING PRINCIPLE
The new banking organization must have suitable shareholders, adequate financial
strength, a legal structure in line with its operational structure, and a management with
sufficient expertise and integrity to operate the bank in a sound and prudent manner.
Where the proposed owner or parent organization is a foreign bank, the prior consent of
its home country supervisor should be obtained.
B. THE APPLICATION
1. The application for authority to establish a bank shall be accomplished in triplicate.
The original copy and duplicate copy shall be submitted to the Supervisory Reports
and Studies Office (SRSO), Bangko Sentral ng Pilipinas (BSP). The third copy shall be
retained by the organizers.
2. The required papers/documents and other information in support of the application
are, as follows:
a.
Appendix 37 - Page 1
APP. 37
98.12.31
Appendix 37 - Page 2
APP. 37
98.12.31
f.
Certified photocopies of Income Tax Returns (ITRs) for the last three (3) calendar
years of each of the incorporators, proposed directors and officers, and subscribers.
g. Clearances from the National Bureau of Investigation (NBI) and Bureau of Internal
Revenue (BIR) of each of the incorporators, proposed directors and officers, and
subscribers.
h. For corporate subscribers:
(1) Copy of the board resolution authorizing the corporation to invest in such
bank; and designating the person who will represent the corporation in
connection therewith;
(2) Copy of the latest articles of incorporation and by-laws;
(3) List of directors and principal officers;
(4) List of major stockholders, indicating the citizenship and the number, amount
and percentage of the voting and non-voting shares held by them;
(5) A copy of the corporations audited financial statements for the last two (2)
years prior to the filing of application;
(6) A copy of the corporations annual report to the stockholders for the year immediately preceding the date of filing of application;
(7) Certified photocopies of ITRs for the last two (2) calendar years; and
(8) BIR clearance.
i.
Appendix 37 - Page 3
APP. 37
98.12.31
Detailed plan of operation and economic justification for establishing the bank.
(The plan of operation should describe and analyze the market area from which
the bank expects to draw the majority of its business and establish a strategy for
the banks ongoing operations. It should also describe how the bank will be
organized and controlled internally. The economic justification for establishing
the bank should provide information on the economic profile of the region, e.g.,
population, agricultural/industrial/service projects to be financed).
k.
Projected monthly financial statements for the first twelve (12) months of operations, together with assumptions. (The financial projections should be consistent
and realistic in relation to the banks proposed strategic plan, and should show
sufficient capital to support the banks strategy, specially in the light of start-up
costs and possible operational losses in the early stages.)
l.
Proposal by each of the subscribers on how they will raise the amount to pay for
their proposed paid-up capitalization in the bank.
Appendix 37 - Page 4
APP. 37
98.12.31
3. The application shall be considered filed on a first-come, first-served basis: Provided, That all the required documents are complete and properly accomplished.
4. Pursuant to Section 26 of R. A. No. 7653, approval of application shall be subject,
among others, to the waiver of secrecy of deposits under Sec. X338.
5. Prescribed application form, together with other forms, is available at the Studies and
Chartering Group, SRSO.
C. CAPITAL REQUIREMENT/STOCKHOLDINGS
1. Banks to be established shall comply with the required minimum capital prescribed
under Subsec. X106.1 or as may be prescribed by the Monetary Board.
2. At least twenty-five percent (25%) of the total authorized capital stock shall be subscribed by the subscribers of the proposed bank, and at least twenty-five percent
(25%) of such subscription shall be paid-up: Provided, That in no case shall the paidup capital be less than the minimum required capital stated in Item 1 above.
3. Stockholdings of any person or persons related to each other within the third (3rd)
degree of consanguinity or affinity, or one (1) or more corporations wholly-owned or
majority of the voting stock of which is owned by such person or persons shall not
exceed twenty percent (20%) of the voting stock of the bank; while stockholdings
of any other corporation, or two (2) or more corporations wholly-owned or majority
of the voting stock of which is owned by the same group of persons shall not exceed
thirty percent (30%) of the voting stock of the bank. (Temporarily waived for a period of 10 years from the effectivity of R.A. No. 7906, i.e., 17 March 1995 for TBs;
and from the date of approval of R.A. No. 7353, i.e., 2 April 1992 for RBs).
4. At least seventy percent (70%) of voting stock of any KB shall be owned by Filipino
citizens: Provided, That such percentage may be lowered to sixty percent (60%) with
approval of the President of the Philippines. For any TB, at least forty percent (40%)
of its voting stock shall be owned by Filipino citizens. Subject to Section 4 of R.A.
No. 7353, all of the capital stock of any RB shall be fully owned and held, directly or
indirectly, by Filipino citizens or corporations, associations or cooperatives qualified
under Philippine laws to own and hold such capital stock.
D. INCORPORATORS/SUBSCRIBERS, DIRECTORS AND OFFICERS
1. The incorporators/subscribers and proposed directors and officers must be persons
of integrity and of good credit standing in the business community. The subscribers
must have adequate financial strength to pay for their proposed subscriptions in the
bank.
Appendix 37 - Page 5
APP. 37
98.12.31
2. The incorporators/subscribers and proposed directors and officers must not have been
convicted of any crime involving moral turpitude, and unless otherwise allowed under the provisions of existing laws are not officers or employees of a government
agency, instrumentality, department or office charged with the supervision of, or the
granting of loans to banks.
3. A bank may be organized with not less than five (5) nor more than fifteen (15) incorporators. In case there are more than fifteen (15) persons initially interested in organizing and investing in the proposed bank, the excess may be listed among the original
subscribers in the Articles of Incorporation.
4. The number of members of the board of directors of the bank shall not be less than five
(5) nor more than fifteen (15) and shall always be in odd numbers.
5. At least two-thirds (2/3) of the members of the board of directors of any KB shall be
Filipino citizens; at least a majority of the members of the board of directors of any TB
shall be Filipino citizens; and all members of the board of directors of an RB shall be
Filipino citizens.
6. No appointive or elective public official, whether full-time or part-time shall at the
same time serve as officer of a KB or a TB except in cases where such service is
incident to financial assistance provided by the government or a government-owned
or -controlled corporation to the bank.
7. The proposed directors and officers of the bank shall be subject to qualifications and
other requirements under Sections X141, X142 and X143.
a. Qualifications of a director. A director shall have the minimum qualifications
prescribed in Subsec. X141.2. In addition, for TBs and RBs, at least one (1) of the
members of the Board of Directors must, in addition to the minimum qualifications, have at least one (1) year experience in banking and/or finance: Provided,
That this requirement may be waived if the TB or RB is to be established in a
municipality or city where there is no existing bank.
b. Qualifications of an officer. An officer shall have the minimum qualifications
prescribed in Subsec. X142.2. In addition, for KBs, the president must, in addition to the minimum qualifications, have at least two (2) years experience in banking and/or finance. For TBs and RBs, any one (1) of the president, chief operating
officer or general manager must, in addition to the minimum qualifications, have
at least two (2) years experience in banking and/or finance.
c.
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(4) Bio-data sheet, evidence of citizenship and NBI and BIR clearances of each of
the officers (who have not had the previous approval of the Monetary Board/
Governor) which are needed for the evaluation of their qualifications as officers;
(5) Chart of organization (The chart should show the names of departments/units/
offices with their respective functions and responsibilities, and the designations of positions in each department/unit/office with their respective duties
and responsibilities. The internal organization should provide for a management structure with clear accountability, a board of directors with ability to
provide independent check on management, and independent audit and compliance functions, and should follow the four eyes principle, e.g., segregation of various functions, cross-checking, dual control of assets, double signatures, etc.);
(6) Manual of operations embodying the policies and operating procedures of
each department/unit/office, covering such areas as signing/delegated authorities, etc. (for KBs and TBs);
(7) Plantilla showing the positions with corresponding salaries, the total of which
should more or less conform with the amount of salaries shown in the submitted projected statement of earnings and expenses;
(8) Two (2) sets of specimens of principal bank accounting and other forms;
(9) Bond policy on officers and custodial employees;
(10) Insurance policy on bank properties required to be insured;
(11) Blueprint of floor layout of bank premises;
(12) Contract of lease on banks premises, if the same are to be leased;
(13) Excerpts of the minutes of the organizational meetings confirming all organizational and pre-opening transactions relative to activities undertaken to prepare
the bank to operate (such as appointment of officers, contract of lease, etc.);
(14) An alphabetical list of stockholders with the number and percentage of voting
stocks owned by them;
(15) A separate list containing the names of persons who own voting stocks in banks
and who are related to each other within the third (3rd) degree of consanguinity
or affinity, with proper indication of the combined percentage of voting stocks
held by them in the particular bank, as well as corporations which are wholly-
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d. List of prospective Coop Bank personnel (Manager, Cashier, Bookkeeper and Inspector) together with their bio-data, also under oath and in triplicate; and
e. Pertinent data and information to show that there is economic justification for the
establishment of a Coop Bank in the province applied for.
Sec. 5. Limitation on the establishment of cooperative bank. Only one (1) Coop Bank
shall be established in each province, which must be located in a place accessible to the
public.
Sec. 6. Limitation on capital contribution of cooperatives. Capital contributions in a
Coop Bank shall be as widely dispersed as possible. No cooperative-member shall own or
control more than thirty percent (30%) of the total capital contributions of a Coop Bank. This
limitation shall also apply to cooperatives purchasing government-held preferred shares of
Coop Banks which are converted into common stock.
Sec. 7. Capitalization. A local Coop Bank shall comply with the minimum paid-up capital
prescribed under Subsec. X106.1e. In addition, Land Bank of the Philippines shall invest at
least P1.0 million as counterpart capital.
Sec. 8. Members of the board of directors. The number of members of the board of
directors of a Coop Bank shall not be less than five (5) nor more than fifteen (15) which shall
at all times be in odd numbers. These directors shall come from the ranks of the authorized
representatives of the cooperative-members.
Sec. 9. Qualifications and disqualifications of officers and directors. Officers, such as
President, Vice-President, Manager, Treasurer, Cashier and Accountant and directors of the
Coop Bank must possess the qualifications and none of the disqualifications prescribed under
Sections X141, X142 and X143.
Sec. 10. Limitation on officership/directorship. Any officer or employee of the CDA shall
be disqualified to be elected or appointed to any position in a Coop Bank. Elective officials of
the Government, except barangay officials, shall also be ineligible to become officers and
directors of Coop Banks.
Sec. 11. Pre-cooperative bank operation requirements. Before the application is submitted to the Monetary Board for action, the proposed Coop Bank is required to submit the
location plan and the cost estimates of the proposed bank building and proposed lease contract, if it is to be leased and/or deed of sale of bank lot, if it is to be purchased. In the case of
leased premises, a Coop Bank may initially hold its office in said leased premises on a five (5)year term, renewable for the same period at the option of the bank.
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Within eight (8) months from receipt of advice of approval of the Monetary Board of its
application, the proposed Coop Bank shall:
a. Complete the construction and furnishing of the bank building which shall be equipped
with facilities, furniture, forms and stationery, and vault of reinforced concrete with a
steel two (2)-hour fire resistant door in accordance with the specification of BSP with a
time delay device;
b. Effect and complete the training/seminar of directors, officers and employees of the
Coop Bank;
c. Submit the plantilla of organization and bonds of accountable officers; and
d. Inaugurate and open the Coop Bank for business.
Sec. 12. Training of personnel, directors and officers. The following personnel of the
Coop Bank as well as the directors and officers are required to undergo training at the BSP
Institute.
a. The manager who must possess the qualifications and none of the disqualifications
prescribed under Subsecs. X142.2 and X143.2.
b. The cashier who must also possess the qualifications and none of the disqualifications
prescribed under Subsecs. X142.2 and X143.2.
c. The bookkeeper who must be at least twenty-one (21) years old, a college degree
holder, and must have at least eighteen (18) units in accounting.
d. The field inspector-appraiser who must be at least twenty-one (21) years old, at least a
high school graduate, and must have knowledge/experience in farming, preferably an
agriculture graduate.
Sec. 13. Validity period of authority to operate the cooperative bank. The Coop Bank
shall be organized and opened for business within eight (8) months upon receipt by the proposed Coop Bank of the notice of approval of its application by the Monetary Board, otherwise, the authority to operate shall be deemed automatically revoked.
Sec. 14. These rules and regulations supersede the Guidelines for the Organization of
Rural Banks by Cooperatives, approved under MB Resolution No. 612 dated June 19, 1987.
Appendix 38 - Page 3
APP. 39
99.12.31
TIME
Philippine Clearing
House Corporation (PCHC)
METRO MANILA
ACTIVITIES
DAY 1
BSP
Regional Clearing
Centers (BSP RCC)
2:00 PM
4:00 PM
6:00 PM
6:30 PM
(Begin-of-day) Final
Banks DDA balance
Cut-off Time
Submission of
Financial Transactions
Affecting BSP
Update Banks DDA
Balances for EFTIS
Transactions
Update Banks DDA
Balances
1st Broadcast Banks
DDA Balance
DAY
7:30 AM
8:00 AM
8:30 AM
Interbank
Returned COCI Call Loan (IBCL)
CLEARING
Window
Returned COCI
Receiving
Window
T+O
T+O
Returned
COCI CLEARING
Returned COCI
Receiving Window
Update Banks
DDA Balances
8:31 AM
9:29 AM
9:30 AM
Returned COCI
Returned
Exchange
COCI
Returned COCI Clearing
Processing
Results Available (BSP)
Returned COCI Receiving
Update Banks DDA
Clearing Results Processing
(Returned COCI Clearing
10:00 AM Available (BSP) of Interbank
Results)
11:00 AM
Call Loan
2nd Broadcast Updated
Transactions
Banks DDA
11:30 AM
Balance
IBCL Netting
Operation
12:30 PM
IBCL Results
1:00 PM
Available
Update Banks DDA
(BSP)
(IBCL Results)
2:00 PM
(End-of-Day) Final Banks (T + O) DDA Balance UNLESS
BSP Decides to "UNWIND" IBCL Transactions
Unwinding Operation Window
2:01 PM
Selective Broadcast of Final
DDA Balances for
"Unaffected Banks
3:00 PM
Unwinding Process
(Affected Banks Only)
4:00 PM
Broadcast affected Banks
Final DDA Balances
T+O
T+O
T+O
T+O
T+O
Appendix 39 - Page 1
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Section 1. Statement of Policy. The Bangko Sentral, consistent with its primary objective of
maintaining price stability under its charter (R.A. No. 7653), shall comply with its mandate
under Section 11(c) of R.A. No. 7835 (Comprehensive and Integrated Shelter Financing Act)
by providing short-term rediscounting facility to qualified banking institutions providing
financing for socialized and low-cost housing.
Sec. 2 Criteria for Eligibility
a. Eligible Banks
KBs, TBs and RBs/Coop Banks which are qualified to rediscount with the DLC, under
existing rules and regulations, and with unused rediscounting ceiling at the time of
application for rediscounting can avail themselves of this rediscounting facility.
b. Eligible Housing Loan Paper
Housing loan papers for rediscounting under this facility shall satisfy the following
requirements:
(1) Loan purpose and amount. The loan shall be used for the construction of a house/
acquisition of a house and lot. The amount of the loan shall not exceed P180,000.00
for socialized housing and P375,000.00 for economic housing, as prescribed under
existing guidelines of the HUDCC for the implementation of various government
housing programs, or in such other amounts which HUDCC may prescribe in the
future for said housing loans.
(2) Loan limit. The amount of the loan shall not exceed the amount of amortization
covering principal payments due within one (1) year from date of rediscount, subject
to the terms and conditions discussed in Section 3.
(3) Security. The subject property shall be covered by a duly registered Real Estate Mortgage
(REM) in favor of the rediscounting bank.
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Sec. 3
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Accreditation Criteria
For accreditation purposes, PFIs shall initially be evaluated/appraised on the basis of the
following pre-qualifying criteria:
1. The PFI shall submit a certification on the following:
a. Compliance with the prescribed minimum capital to risk assets ratio of ten percent
(10%), minimum capitalization, legal and liquidity reserve requirements for deposit
liabilities, deposit substitutes, common trust funds (CTFs) and Trust and Other
Fiduciary Accounts (TOFA)-Others, liquidity floor requirement for government
funds held, and ceilings on credit accommodations to directors, officers,
stockholders and their related interests (DOSRI), for six (6) consecutive months
prior to the filing of application for accreditation.
b. As of application date, the PFI has generally complied with the orders or instructions
of the Monetary Board and/or BSP Management, more particularly:
(i) Set-up of the required general loan loss and specific provisioning
requirements.; and
(ii) Correction of major violations and previous years exceptions noted in the
latest BSP examination.
c. The PFI has no past due obligations with the BSP or with any government financial
institution.
d. The PFIs accounting records, systems, procedures and internal control systems
are satisfactorily maintained.
2. Profitability
a. For PFIs operating for more than three (3) years as of date of filing of the application
for accreditation - Operating profitably for three (3) consecutive years prior to the
filing of application for accreditation.
b. For PFIs operating for less than three (3) years as of date of filing of the application
for accreditation - Operating profitably for two (2) consecutive years prior to the
filing of application for accreditation.
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3. Capital
Compliance with minimum capital accounts of P400 million or BSP required minimum
capitalization applicable to the category where the PFI belongs, whichever is higher.
4. Non-performing loans ratio for six (6) consecutive months prior to the filing of
application for accreditation shall not exceed the industry ratio which may be obtained from
the SRSO of the BSP.
5. Ownership/Management
For PFIs operating for less than three (3) years as of date of filing of the application for
accreditation
a. Domestic bank owned by reputable individuals/institutions and managed by
reputable and experienced bankers.
b. Philippine branch of a foreign bank carrying an international investment grade
rating acceptable to the government bank with foreign banks (Head Office/parent
bank) unconditional and irrevocable guarantee on loan availments of Philippine
branch or subsidiary.
II. Grant and Renewal of Credit Lines to Accredited PFIs
1. Government banks shall provide credit lines for a specified term to each accredited
PFI based on the results of the quantitative and qualitative evaluation guidelines to be
formulated in accordance with credit policies and procedures approved by the banks
Board of Directors and/or as prescribed by the institutions, organizations or agencies
which provide the funds.
2. PFIs shall be subject to quantitative and qualitative evaluation as well as the accreditation
criteria when applying for renewal of credit lines.
3. Government banks may suspend the release of funds to PFIs that failed to meet any of
the quantitative and qualitative evaluation guidelines and/or the accreditation criteria.
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DEED OF UNDERTAKING
FOR THE ISSUANCE OF REDEEMABLE PREFERRED SHARES
[Appendix to Subsec. X126.5a(3)(e)]
We, the majority of the members of the Board of Directors and key executive officers
of _________________________________________, a banking corporation duly registered and
organized under the laws of the Republic of the Philippines, with principal office and place of
business at ____________________________________, by these presents do hereby obligate
ourselves to undertake the following in the issuance of preferred stock:
1. That the issuance of preferred stock shall be in accordance with the terms and conditions of approval by the Bangko Sentral ng Pilipinas (BSP) and pertinent rules and regulations
of the BSP and that of the Securities and Exchange Commission (SEC)/Cooperative Development Auhority (CDA);
2. That any preferred shares so issued shall not be redeemed, retired, converted to any
other kind of stocks or securities or paid back in cash or property without the prior approval of
BSP in accordance with Subsection X126.5 and 3127.4 of the Manual of Regulations for
Banks, Section 8, R.A. 7353 and other applicable regulations and banking laws;
3. That in no case shall the issuance of preferred shares be treated as similar to or as a
substitute of other form of temporary investments of clients and depositors such as time
deposits, savings deposits, money market placements or other form of investments subject to
withdrawal;
4. That outstanding preferred shares may be redeemed or retired only if the shares
redeemed or retired are replaced with at least an equivalent amount of newly paid-in shares
so that the total paid-in capital stock is maintained at the same level immediately prior to
redemption or retirement: Provided, That no outstanding preferred share shall be redeemed
within five (5) years from full payment of the subscription or issuance of stock certificate
therefor;
5. That we, the undersigned, shall ensure that the above undertakings are strictly complied with and observed at all times by the management of the bank;
6. That non-compliance with this undertaking shall subject the directors/officers involved liable to such administrative sanctions as the Monetary Board may impose and such
other sanctions as may be provided pursuant to Section 37 of R.A. 7653, without prejudice to
the criminal sanctions under Section 36 of the same Act.
IN WITNESS WHEREOF, we have hereunto affix our signature on this ______ day of
____________________, 20__.
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App. 42
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Directors:
____________________________
____________________________
____________________________
____________________________
Officers:
_____________________________
_____________________________
_____________________________
_____________________________
Name
_________________________
_________________________
_________________________
_________________________
_________________________
_________________________
Comm.
Tax Cert.
No.
_________
_________
_________
_________
_________
_________
Date of Issue
Place of Issue
_________________ ______________________
_________________ ______________________
_________________ ______________________
_________________ ______________________
_________________ ______________________
_________________ ______________________
IN WITNESS WHEREOF, I have hereunto set my hand and seal on the date and place
above written.
Notary Public
Until December 31, 20___
PTR No. ______________
Issued at _________on __________
Doc. No.
Page No.
Book No.
Series of
__________;
__________;
__________;
__________.
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Appendix 44 - Page 2
h)
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Allied Undertaking
KBs
TBs and RBs
Other financial allied
undertakings
Limit
- Up to 49%
- Up to 100%
- Up to 100% without
prejudice to the
limitations prescribed
in Subsec. 1378.1 (of
the MRBOFI).
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4)
5)
6)
7)
8)
9)
Appendix 44 - Page 19
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3)
4)
5)
6)
Appendix 44 - Page 20
APP. 44
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Appendix 44 - Page 21
APP. 45
01.12.31
NOTES ON MICROFINANCE
(Appendix to Subsec. X361)
A. Definition of Microfinance
Microfinance is the provision of a broad range of financial services, such as deposits,
loans, payment services, money transfers and insurance products to the poor and low-income
households, for their microenterprises and small businesses, to enable them to raise their
income levels and improve their living standards.
B. Core Principles for Microfinance
1. The poor needs access to appropriate financial services
2. The poor has the capability to repay loans, pay the real cost of loans and generate
savings.
3. Microfinance is an effective tool for poverty alleviation
4. Microfinance institutions must aim to provide financial services to an increasing
number of disadvantaged people
5. Microfinance can and should be undertaken on a sustainable basis
6. Microfinance non-governmental organizations (NGOs) and programs must develop
performance standards that will help define and govern the microfinance industry toward
greater reach and sustainability
C. Characteristics and Features of Microfinance
Characteristics
Type of client
Lending Technology
Distinguishing Features
Low income
Employment in informal sector; low wage bracket
Lack of physical collateral
Closely interlinked household/business activities
Prompt approval and disbursement of micro loans
Lack of extensive loan records
Collateral substitutes; group-based guarantees
Conditional access to further micro-credits
Information-intensive character-based lending linked to
cash flow analysis and group-based borrower selection
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APP. 45
01.12.31
Loan Portfolio
Organizational Ideology
Institutional Structure
Highly volatile
Risk heavily dependent on portfolio management skills
Remote from/non-dependent on government
Cost recovery objective vs. profit maximizing
Decentralized
Insufficient external control and regulation
Capital base is quasi-equity (grants, soft loans)
Appendix 45 - Page 2
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01.12.31
The old (and by now highly discredited as ineffective) approach to loans for lowincome borrowers emphasized subsidized interest rates. It did not recognize that subsidized
below-market interest rates do not necessarily result in opening up access to financial services
for low-income households and microenterprises.
The new approach which has been demonstrated by global experience is characterized
by a market-based interest rate regime which permits the institution providing microfinance
services to cover administrative costs, provisions for loan losses and intermediation/funding
costs. This basis is consistent with financially sustainable rural finance and microfinance.
Invariably, the global experience continues to validate the proposition that what matters most
to the poor and undeserved segments is access to financial services rather than their interestrate cost - most especially because microenterprise and small business borrowers will take a
microfinance loan whose repayment period (monthly repayment) match the additional cash
flows they hope to generate.
Therefore, interest on such microfinancing loans shall be reasonable but shall not be
lower than the prevailing market rates. This is to enable the lending institution to recover the
financial and operational costs incidental to this type of microfinance lending but also to
realize some bottom line gains.
H. Segments of Demand for Micro-credit
1. The landless who are engaged in agricultural work on a seasonal basis and manual
laborers in forestry, mining, household industries, construction and transport; requires credit
for consumption needs and also for acquiring small productive assets, such as livestock.
2. Small and marginal farmers, rural artisans, weavers and those self-employed in the
urban informal sector as hawkers, vendors, and workers in household micro-enterprises:
requires credit for working capital, including a small part for consumption needs. This segment
largely comprises the poor but not the poorest.
3. Medium farmers/small entrepreneurs who have gone in for commercial crops and
others engaged in dairy, poultry, etc. Among non-farm activities, this segment includes those
in villages and slums engaged in processing or manufacturing activity. These persons live
barely above the poverty line and also suffer from inadequate access to formal credit.
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Annex A
It is satisfied that the banks risk management system is conceptually sound and is
implemented with integrity;
The bank has in the BSPs view sufficient number of staff skilled in the use of
sophisticated models not only in the trading area but also in the risk control, audit and
if necessary, back office areas;
The banks models have in the BSPs judgment a proven track record of reasonable
accuracy in measuring risk; and
The bank regularly conducts stress tests along the lines discussed in Part V below.
3. The BSP may require a period of initial monitoring and live testing of a banks internal
model before it is used for supervisory capital purposes.
4. In addition to these general criteria, banks using internal models for capital purposes shall
be subject to the requirements detailed in Parts II to VII below.
II. Qualitative Standards
5. Banks using internal models must have market risk management systems that are
conceptually sound and implemented with integrity. Accordingly, a number of qualitative
criteria that banks would have to meet before they are permitted to use a model-based
approach are specified in paragraph 6 below. The extent to which banks meet the qualitative
criteria may influence the level at which the BSP will set the multiplication factor referred
to in Part IV, paragraph 8(j) below. Only those banks whose models are in full compliance
with the qualitative criteria as listed in this section will be eligible for application of the
minimum multiplication factor.
Appendix 46 - Page 4
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Appendix 46 - Page 5
APP. 46
02.12.31
documented, for example, through a risk management manual that describes the basic
principles of the risk management system and that provides an explanation of the
empirical techniques used to measure market risk.
(h) An independent review of the risk measurement system should be carried out regularly
in the banks own internal auditing process. This review should include both the
activities of the business trading units and of the independent risk control unit. A
review of the overall risk management process should take place at regular intervals
(ideally not less than once a year) and should specifically address, at a minimum:
-
the adequacy of the documentation of the risk management system and process;
the approval process for risk pricing models and valuation systems used by front
and back-office personnel;
the verification of the consistency, timeliness and reliability of data sources used
to run internal models, including the independence of such data sources;
Appendix 46 - Page 6
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02.12.31
(a) For interest rates, there must be a set of risk factors corresponding to interest rates in
each currency in which the bank has interest rate-sensitive on- or off-balance sheet
positions.
-
The risk measurement system should model the yield curve using one (1) of a
number of generally accepted approaches, for example, by estimating forward
rates of zero coupon yields. The yield curve should be divided into various maturity
segments in order to capture variation in the volatility of rates along the yield
curve; there will typically be one (1) risk factor corresponding to each maturity
segment. For material exposures to interest rate movements in the major currencies
and markets, banks must model the yield curve using a minimum of six (6) risk
factors. However, the number of risk factors used should ultimately be driven by
the nature of the banks trading strategies. For instance, a bank with a portfolio of
various types of securities across many points of the yield curve and that engages
in complex arbitrage strategies would require a greater number of risk factors to
capture interest rate risk accurately; and
The risk measurement system must incorporate separate risk factors to capture
spread risk (e.g., between bonds and swaps). A variety of approaches may be
used to capture the spread risk arising from less than perfectly correlated movements
between government and other fixed-income interest rates, such as specifying a
completely separate yield curve for non-government fixed-income instruments (for
instance, swaps or local government unit securities) or estimating the spread over
government rates at various points along the yield curve.
(b) For equity prices, there should be risk factors corresponding to each of the equity
markets in which the bank holds significant positions.
-
At a minimum, there should be a risk factor that is designed to capture marketwide movements in equity prices (e.g., a market index). Positions in individual
securities or in sector indices could be expressed in beta-equivalents relative to
this market-wide index;
The most extensive approach would be to have risk factors corresponding to the
volatility of individual equity issues.
The sophistication and nature of the modeling technique for a given market should
correspond to the banks exposure to the overall market as well as its concentration in
individual equity issues in that market.
Appendix 46 - Page 7
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02.12.31
(c) For exchange rates, the risk measurement system should incorporate risk factors
corresponding to the individual foreign currencies in which the banks positions are
denominated. Since the value-at-risk (VaR) figure calculated by the risk measurement
system will be expressed in Philippine peso, any net position denominated in a foreign
currency will introduce a foreign exchange risk. Thus, there must be risk factors
corresponding to the exchange rate between the Philippine peso and each foreign
currency in which the bank has a significant exposure.
IV. Quantitative Standards
8. Banks will have flexibility in devising the precise nature of their models, but the following
minimum standards shall apply for the purpose of calculating their capital charge:
(a) Value-at-risk (VaR) must be computed on a daily basis.
(b) In calculating VaR, a 99th percentile, one-tailed confidence interval is to be used.
(c) In calculating VaR, an instantaneous price shock equivalent to a 10-day movement in
prices is to be used, i.e., the minimum holding period will be ten (10) trading days.
Banks may use VaR numbers calculated according to shorter holding periods scaled
up to ten (10) days by the square root of time. (For the treatment of options, also see
paragraph (h) below.)
(d) The choice of historical observation period (sample period) for calculating VaR will be
constrained to a minimum length of one (1) year. For banks that use a weighting
scheme or other methods for the historical observation period, the effective
observation period must be at least one (1) year (that is, the weighted average time lag
of the individual observations cannot be less than six (6) months).
(e) Banks should update their data sets no less frequently than once every three (3) months
and should also reassess them whenever market prices are subject to material changes.
The BSP may also require a bank to calculate its VaR using a shorter observation
period if in the BSPs judgment, this is justified by a significant upsurge in price volatility.
(f) No particular type of model is prescribed. So long as each model used captures all the
material risks run by the bank, as set out in Part III, banks will be free to use models
based, for example on variance-covariance matrices, historical simulations, or Monte
Carlo simulations.
(g) Banks will have discretion to recognize empirical correlations within broad risk
categories (e.g., interest rates, exchange rates and equity prices, including related
options volatilities in each risk factor category). The BSP may also recognize
empirical correlations across broad risk factor categories, provided that the BSP is
satisfied that the banks system for measuring correlations is sound and implemented
with integrity.
Appendix 46 - Page 8
APP. 46
02.12.31
(h) For banks with option transactions, banks models must accurately capture the unique
risks associated with options within each of the broad risk categories. The following
criteria apply to the measurement of options risk:
-
Banks are expected to ultimately move towards the application of a full 10-day
price shock to options positions or positions that display option-like
characteristics. In the interim, the BSP may require banks to adjust their capital
measure for options risk through other methods, e.g., periodic simulations or stress
testing; and
Each banks risk measurement system must have a set of risk factors that captures
the volatilities of the rates and prices underlying option positions, i.e., vega risk.
Banks with relatively large and/or complex options portfolios should have detailed
specifications of the relevant volatilities. This means that banks should measure
the volatilities of options positions broken down by different maturities.
(i) Each bank must meet, on a daily basis, a capital requirement expressed as the higher
of (i) last trading days VaR number or (ii) an average of the daily VaR measures on
each of the preceding sixty (60) trading days (both measured according to the parameters
specified in this section) multiplied by a multiplication factor.
(j) The multiplication factor shall be set by the BSP on the basis of its assessment of the
quality of the banks risk management system subject to an absolute minimum of
three (3). Banks will be required to add to this factor a plus directly related to the expost performance of the model (to be determined on a quarterly basis), thereby
introducing a built-in positive incentive to maintain the predictive quality of the model.
The plus will range from 0 to 1 based on the number of backtesting exceptions (i.e.,
the number of times that actual/hypothetical loss exceeds the VaR measure) for the
past 250 trading days of the reference quarter-end as set out in Table 5 of the Instructions
for Accomplishing the Report on Computation of the Adjusted Risk-Based Capital
Adequacy Ratio Covering Combined Credit Risk and Market Risk. (Table 3 for banks
with expanded derivatives authority but without option transactions, and banks without
expanded derivatives authority.)
(k) Banks using models will be subject to a separate capital charge to cover the specific
risk of interest rate-related instruments and equity securities as defined in the
standardized approach to the extent that this risk is not incorporated into their models.
However, for banks using models, the total specific risk charge applied to interest raterelated instruments or to equities should in no case be less than half the specific risk
charges calculated according to the standardized methodology.
Appendix 46 - Page 9
APP. 46
02.12.31
V. Stress Testing
9. Banks using internal models for measuring market risk capital requirements must have in
place a rigorous and comprehensive stress testing program. Stress testing to identify events
or influences that could greatly impact banks is a key component of a banks assessment
of its capital position.
10. Banks stress scenarios should cover a range of factors that can create extraordinary
losses or gains in trading portfolios, or to make the control of risks in those portfolios
very difficult. These factors include low-probability events in all major types of risks,
including the various components of market, credit, and operational risks. Stress scenarios
should shed light on the impact of such events on positions that display both linear and
non-linear price characteristics (i.e., options and instruments that have options-like
characteristics).
11. Banks stress tests should be both of a qualitative and quantitative nature, incorporating
both market risk and liquidity aspects of market disturbances. Quantitative criteria should
identify plausible stress scenarios to which banks could be exposed. Qualitative criteria
should emphasize that two (2) major goals of stress testing are to evaluate the capacity
of the banks capital to absorb potential large losses and to identify steps the bank can
take to reduce its risk and conserve capital. This assessment should be integral to
setting and evaluating the banks management strategy and the results of stress testing
should be regularly reported to senior management and, periodically, to the board of
directors (or equivalent management committee in the case of Philippine branches of
foreign banks).
12. Banks should combine the use of supervisory stress scenarios with stress tests developed
by banks themselves to reflect their specific risk characteristics. Specifically, the BSP may
ask banks to provide information on stress testing in the following three (3) broad areas:
(a) Supervisory scenarios requiring no simulation by the bank. Banks should provide the
BSP information on the largest losses experienced during the reference quarter. This
loss information could be compared to the level of capital that results from a banks
internal measurement system. For example, it could provide BSP with a picture of
how many days of peak day losses would have been covered by a given VaR estimate.
(b) Scenarios requiring a simulation by the bank. Banks should subject their portfolios
to a series of simulated stress scenarios and provide BSP with the results. These
scenarios could include testing the current portfolio against past periods of significant
disturbance, for example, the early 80s banking crisis or the 1997 Asian financial
crisis, incorporating both the large price movements and the sharp reduction in
liquidity associated with these events. A second type of scenario would evaluate the
sensitivity of the banks market risk exposure to changes in the assumptions about
volatilities and correlations. Applying this test would require an evaluation of the
Appendix 46 - Page 10
APP. 46
02.12.31
historical range of variation for volatilities and correlations and evaluation of the banks
current positions against the extreme values of the historical range. Due consideration
should be given to the sharp variation that at times has occurred in a matter of days in
periods of significant market disturbance.
(c) Scenarios developed by the bank itself to capture the specific characteristics of its
portfolio. A bank should also develop its own stress test which it identifies as most
adverse based on the characteristics of its portfolio. It should provide the BSP with a
description of the methodology used to identify and carry out the scenarios, as well as
with the description of the results derived from these scenarios.
The results should be reviewed periodically by senior management and should be
reflected in the policies and limits set by management and the board of directors (or
equivalent management committee in the case of Philippine branches of foreign banks).
Moreover, if a banks testing reveals particular vulnerability to a given set of
circumstances, the BSP would expect the bank to take prompt steps to manage those
risks appropriately (e.g., by hedging against that outcome or reducing the size of its
exposures).
VI. External Validation
13. The validation of models accuracy by external auditors and the BSP should at a minimum
include the following steps:
(a) Verify that the internal validation processes described in Part II, paragraph 6 (h) are
operating in a satisfactory manner;
(b) Ensure that the formulae used in the calculation process, as well as for the pricing of
options and other complex instruments, are validated by a qualified unit, which in all
cases should be independent from the trading area;
(c) Check that the structure of internal models is adequate with respect to the banks
activities and geographical coverage;
(d) Check the results of the banks backtesting of its internal measurement system (i.e.,
comparing VaR estimates with actual profits and losses) to ensure that the model
provides a reliable measure of potential losses over time. This means that banks should
make the results, as well as the underlying inputs to their VaR calculation, available to
the BSP and/or external auditors on request; and
(e) Make sure that data flows and processes associated with the risk measurement
system are transparent and accessible. In particular, it is necessary that auditors
or the BSP is in a position to have easy access, whenever they judge it necessary and
under appropriate procedures, to the models specifications and parameters.
Appendix 46 - Page 11
APP. 46
02.12.31
Appendix 46 - Page 12
APP. 46a
03.12.31
1.
Treatment of interest rate risk. Dollar-linked Peso Notes (DLPNs) booked under Trading
Account Securities (TAS) or Available for Sale Securities (ASS) result in interest rate risk.
These exposures shall be included in the report forms in the following manner:
- Under the standardized approach. The market value of the DLPN shall be reported
in Part I.1, Item I.1, and Part I.2, US dollar ladder, under the coupon and time band
corresponding to the DLPNs residual maturity; and
- Under the internal models approach. DLPN exposures must be included in the
computation of Value-at-Risk (VaR) measure for interest rate risk. This VaR measure
shall be reported in Part V, Item 1 (for banks with expanded derivatives authority), or
Part IV, Item 1 (for banks with expanded derivatives authority but without option
transactions and for banks without expanded derivatives authority).
2.
Treatment of foreign exchange risk. DLPNs booked under TAS, ASS or Investment in
Bonds and Other Debt Instruments (IBODI) result in foreign exchange risk. These
exposures shall be included in the report forms in the following manner:
- Under the standardized approach. The market value of the DLPN shall be included
in the computation of the net long/(short) position for US dollar to be reported in Part
III; and
- Under the internal models approach. DLPN exposures must be included in the
computation of VaR measure for foreign exchange risk. This VaR measure shall be
reported in Part V, Item 2 (for banks with expanded derivatives authority), or Part IV,
Item 2 (for banks with expanded derivatives authority but without option transactions,
and for banks without expanded derivatives authority).
APP. 46b
04.12.31
Referring generally to the risk management group functions in the BAP Financial Markets Risk Reference
Manual.
APP. 46b
04.12.31
APP. 46b
04.12.31
APP. 46b
04.12.31
Annex A
(Name of Bank)
COMPLIANCE WITH THE REQUIREMENTS FOR THE USE OF INTERNAL MODELS
Criteria
Yes
No
Bank's
Explanations1
I. General Criteria
1. Is the banks risk management system conceptually sound
and implemented with integrity?
2. Does the bank have sufficient number of staff skilled in
the use of sophisticated models not only in the trading
area but also in the risk control, audit, and if necessary,
back office area?
3. Do the banks models have a proven track record of
reasonable accuracy in measuring risk?
4. Does the bank conduct stress tests along the lines
discussed in Item V below?
II. Qualitative Standards
1. Does the bank have an independent risk control unit
that is responsible for the design and implementation of
the banks risk management system?
(Cite examples of
reports produced
by the unit and
indicate what
time of day these
reports
are
circulated.)
The questions in this checklist may already be addressed by other materials submitted by the Bank. In such cases,
please indicate in this column the appropriate reference document.
App. 46b
04.12.31
Criteria
Yes
No
Bank's
Explanations1
5.
Are trading limits related to the banks risk measurement model in a manner that is consistent over time
and that is well-understood by both traders and
senior management?
The questions in this checklist may already be addressed by other materials submitted by the Bank. In such cases,
please indicate in this column the appropriate reference document.
App. 46b
04.12.31
Criteria
Yes
No
Bank's
Explanations1
The questions in this checklist may already be addressed by other materials submitted by the Bank. In such cases,
please indicate in this column the appropriate reference document.
App. 46b
04.12.31
Criteria
Yes
No
Bank's
Explanations1
The questions in this checklist may already be addressed by other materials submitted by the Bank. In such cases,
please indicate in this column the appropriate reference document.
App. 46b
04.12.31
Criteria
Yes
No
Bank's
Explanations1
B. Equity Prices
1. Are there risk factors corresponding to each of the equity
markets in which the bank holds significant positions?
2. Does the sophistication and nature of the modeling technique for a given market correspond to the banks exposure to the overall market as well as its concentration in
individual equity issues in that market?
The questions in this checklist may already be addressed by other materials submitted by the Bank. In such cases,
please indicate in this column the appropriate reference document.
App. 46b
04.12.31
Criteria
Yes
No
Bank's
Explanations1
C. Exchange Rates
Does the risk measurement system incorporate risk factors
corresponding to the individual foreign currencies in which
the banks positions are denominated, i.e., are there risk factors
corresponding to the exchange rate between the Philippine
peso and each foreign currency in which the bank has a
significant exposure?
IV. Quantitative Standards
1. Is Value-at-risk (VaR) computed on a daily basis?
2. Is a 99th percentile, one-tailed confidence interval used?
3. Is an instantaneous price shock equivalent to a ten (10)
day movement in prices used, i.e., is the minimum
holding period ten (10) trading days?
6.
The questions in this checklist may already be addressed by other materials submitted by the Bank. In such cases,
please indicate in this column the appropriate reference document.
App. 46b
04.12.31
Criteria
Yes
No
Bank's
Explanations1
V. Stress Testing
1. Does the bank have a rigorous and comprehensive stresstesting program in place?
2. Do the banks stress scenarios cover a range of factors
that can create extraordinary losses or gains in trading
portfolios, or to make the control of risks in those
portfolios very difficult, e.g., low-probability events in
all major types of risks, including the various components
of market, credit, and operational risks?
The questions in this checklist may already be addressed by other materials submitted by the Bank. In such cases,
please indicate in this column the appropriate reference document.
App. 46b
04.12.31
Criteria
Yes
No
Bank's
Explanations1
Checking the adequacy of the structure of the internal models with respect to the banks activities?
The questions in this checklist may already be addressed by other materials submitted by the Bank. In such cases,
please indicate in this column the appropriate reference document.
APP. 47
02.12.31
b. Evidence of indebtedness or
obligation of the central monetary authority
of a foreign country, denominated in the
national currency of the issuing country, the
servicing and repayment of which are fully
guaranteed by the government of such
country;
c. Deposits with private and/or
government banks to the extent covered by
deposit insurance; and
d. Such other securities as the Monetary
Board may designate from time to time.
Banks shall refrain from investing sinking
fund resources in highly volatile, high-risk
commercial instruments.
B. Operation
1. Amount of Annual Investment
The annual contribution to the sinking
fund shall be equal to the reserve for
retirement set up for the year, equivalent to
the amount of redeemable shares issued
divided by their respective terms, i.e.,
number of years from date of issue to date of
maturity.
2. Accounting Entries - please refer to
Annex A.
3. Administration
a. Responsible Officer. The sinking
fund shall be administered by the Chief
Executive Officer or his duly authorized
representative, who shall be an employee
Appendix 47 - Page 1
APP. 47
02.12.31
Appendix 47 - Page 2
APP. 47
02.12.31
Annex A
Summary of Pro-Forma Journal Entries to Record Sinking Fund Transactions
a. Setting up the sinking fund. The initial contribution to the sinking fund shall be recorded
as follows:
a.1. To set up Reserve for Retirement of Preferred Stock
Undivided Profits/Surplus Free
xxx
Other Surplus Reserves Reserve for Retirement of Preferred Stock
xxx
To transfer from free to restricted Surplus the amount set up as reserve for
redemption of preferred shares.
a.2. To set up the subsidiary account Sinking Fund (classified as Other Non-Current
Assets)
IBODI/Others Sinking Fund for Redemption of Preferred Shares
Cash/Due from Banks
xxx
xxx
xxx
xxx
xxx
Appendix 47 - Page 3
APP. 47
02.12.31
Cash
xxx
xxx
xxx
To record the liquidation of sinking fund assets and recognize income therefrom.
or:
Cash
Loss from Sale of Sinking Fund Securities
IBODI/Others Sinking Fund for Redemption of Preferred Shares
xxx
xxx
xxx
To record the liquidation of sinking fund assets and loss incurred therefrom.
d.2. Transfer to Undivided Profits/Surplus Free of the balance of the Restricted Surplus
account
Other Surplus Reserves Reserve for Retirement of Preferred Stock
xxx
Undivided Profits/ Surplus Free
xxx
To close the restricted surplus account Other Surplus Reserves Retirement of
Preferred Stock and to revert the balance of the same to Undivided Profits/
Surplus Free.
d.3. Redemption of preferred shares, declaration of stock dividend equal to amount
of preferred shares redeemed and payment of such dividend through the issuance
of new shares of stock
d.3.1.
Capital Stock Preferred Shares
Cash/Due from Banks
xxx
xxx
xxx
Dividends Distributable
Capital Stock Common Stock/Preferred Stock
xxx
xxx
d.3.3.
xxx
Appendix 47 - Page 4
APP. 48
02.12.31
Appendix 48 - Page 1
APP. 48
04.12.31
Appendix 48 - Page 2
APP. 49
03.12.31
Name of Bank
Address of Head Office
Telefax/Fax Number
Appendix 49 - Page 1
APP. 50
02.12.31
Retention Period
1. Accounting Records
(a) Books of accounts, audited financial/annual reports
(b) Tickets and supporting papers
(c) Official receipts (2nd or 3rd copy)
Permanent
10 years
10 years
10 years
Permanent
Permanent
5. Minutes of meeting
(a) Stockholders/general assembly, board of directors
(b) Other committees
Permanent
10 years
Permanent
10 years from
resignation/separation
retirement
Permanent
Appendix 50 - Page 1
APP. 50
02.12.31
8. Reports to BSP
(Financial and non-financial reports)
6 years
Minimum of 6 years or
as prescribed by the
institution concerned
Permanent
Permanent
Notwithstanding the retention periods herein, RBs/Coop Banks may preserve for a longer
period those records/documents they deem necessary.
B. Procedural requirements on disposal of banks records and documents
(1) No RBs/Coop Banks shall dispose of any records without the prior approval of its
board of directors.
(2) Notice for disposal of records and documents in the prescribed form (Annex A)
which shall include the proposed date of disposal and list of the records and documents to be
disposed of in accordance with the above guidelines shall be submitted to the appropriate
supervising and examining department within ten (10) banking days from date of approval of
the board of directors. A copy of the afore-cited board resolution duly certified by the banks
corporate/cooperative secretary should likewise be attached to the notice. The bank may
proceed to dispose of the records and documents in the submitted list if after thirty (30) banking
days from date the notice required herein shall have been received by the appropriate
supervising and examining department, no advice against such notice has been received by
the bank concerned.
(3) All records and documents for disposal must be burned or shredded in the presence
of a director of the bank duly designated by the board of directors, the Chief Operating Officer
or equivalent rank and the Compliance Officer.
(4) The designated director, the Chief Operating Officer (or its equivalent) and the
Compliance Officer shall execute a joint affidavit (Annex B) attesting to the burning/ shredding
of the records/documents. The original and triplicate copies shall be kept permanently by the
Treasurer or Cashier and the duplicate copy shall be submitted to the appropriate
supervising and examining department within ten (10) banking days from date of actual
disposal.
Appendix 50 - Page 2
APP. 50
02.12.31
Annex A
____________________________
Name of Rural/Cooperative Bank
____________________________
Address
NOTICE OF DISPOSAL OF RECORDS/DOCUMENTS
_______________
Date
The Director
Department of Rural Banks
Bangko Sentral ng Pilipinas
Manila
The Board of Directors of the _________________________ under Board Resolution No.
(Name of Rural/Cooperative Bank)
___________ dated _____________ (copy of the resolution attached) approved the disposal of the
following records/documents:
Classification of Records and Documents
Dates of Transactions/Records/Documents
From
To
1. Accounting Records:
a. Tickets and supporting papers
b. Official Receipts
________________
________________
______________
______________
2. Correspondence:
________________
______________
3. Reports to BSP
________________
______________
________________
______________
________________
________________
______________
______________
Appendix 50 - Page 3
APP. 50
02.12.31
Annex B
REPUBLIC OF THE PHILIPPINES
)
CITY/MUNICIPALITY OF __________ ) S.S
PROVINCE OF _________________ )
JOINT AFFIDAVIT
We, namely: ________________________, Director; ________________, Chief Operating Officer
(or Manager/equivalent rank); and ________________, Compliance Officer, all of legal ages, representing
the Rural/Cooperative Bank of ______________, Inc. after having been sworn to in accordance with
law do hereby depose and say:
1. That we are the bank officials of the Rural/Cooperative Bank of __________, Inc., duly
designated under Board Resolution No. ____ dated ____________, to ensure and witness
the proper disposal of certain records, described in the attached Notice of Disposal of
Bank Records/Documents dated _______ (Annex A).
2. That we have witnessed the burning/shredding of those records/documents described in
the Notice of Disposal of Bank Records/Documents dated ____________that took place on
_______________ 2002 at _____________ am/pm at the premises of the Rural/Cooperative
Bank of _______________.
3. That we have executed this Affidavit to attest to the truthfulness of the foregoing and in
accordance with the rules prescribed by the Bangko Sentral ng Pilipinas (BSP) set forth
under Circular-Letter No. ___ dated _________, 2002.
IN WITNESS WHEREOF, we have set our hands this _____ day of _______2002 at
______________________, Philippines.
____________________________ ___________________________________________________
SUBSCRIBED AND SWORN TO BEFORE ME, this ______ day of ________ 2002 at
______________, the foregoing Affiants, exhibiting their respective Community Tax Certificates (CTC),
to wit:
Name
CTC No.
Date Issued
Place Issued
NOTARY PUBLIC
My Commission expires on December 31, 2002
PTR No. _____ issued on ________ 2002 at _______
Doc. No. _____
Book No. _____
Page No. _____
Series of 2002
Appendix 50 - Page 4
APP. 51
03.12.31
_____________________________________________________________
(Name of Bank)
CERTIFICATION
Pursuant to Subsec. X501.3c of the Manual of Regulations for Banks, we hereby certify1
that on all banking days of the month ended _____________, 200 __ :
a)
There were no foreign currency borrowings by the Regular Banking Unit (RBU)
from the Foreign Currency Deposit Unit (FCDU)/Expanded FCDU (EFCDU)
b)
We further certify that, to the best of our knowledge, the foregoing statements are true
and correct.
_____________________
President or Country
Manager (for FX Banks)
TIN:
Com. Tax Cert No.:
Issued on:
Issued at:
_________________
Compliance Officer
TIN:
Com. Tax Cert No.:
Issued on:
Issued at:
___________________
Head of
Treasury Department
TIN:
Com. Tax Cert No.:
Issued on:
Issued at:
Subscribed and sworn to before me, this _______ day of ___________, 200___,
affiants exhibiting their respective Community Tax Certificates as indicated above.
_______________________
Person administering oath
1
Appendix 51 - Page 1
APP. 51a
03.12.31
Average FCDU/EFCDU
Deposit Liabilities1/
Amount
30%
August 2
9
12
13
14
15
16
19
20
21
22
23
26
27
28
29
30
Sept
2
3
4
5
6
9
10
11
12
1/
140
120
42
36
30
45
30
110
33
10
5
5
8
2
1
2
3
36
36
200
60
42
33
170
51
2/
27
42
6
2
4
250
75
3
2
66
27
15
4
4
10
15
20
28
30
31
33
36
36
36
33
33
33
33
33
39
41
37
40
42
27
23
27
Computed using 2-month rolling data (i.e., for week ended 02 August, average of daily data from 03 June to 02 August;
week ended 09 August, average of daily data from 10 June to 09 August, etc.).
Average daily balance for each observation period = Sum of daily balances/Total banking days
2/
RBU should pay off to reduce outstanding balance to within prescribed limit.
APP. 52
03.12.31
Appendix 52 - Page 1
APP. 52
03.12.31
Appendix 52 - Page 2
APP. 52
03.12.31
(a) A securities broker includes a person engaged in the business of buying and selling
securities for the account of others.
(b) A securities dealer includes any person who buys and sells securities for his/her
account in the ordinary course of business.
(c) A securities salesman includes a natural person, employed as such or as an agent,
by a dealer, issuer or broker to buy and sell securities.
(d) An associated person of a broker or dealer includes an employee thereof who
directly exercises control or supervisory authority, but does not include a salesman, or
an agent or a person whose functions are solely clerical or ministerial.
(e) An investment house includes an enterprise which engages or purports to engage,
whether regularly or on an isolated basis, in the underwriting of securities of another
person or enterprise, including securities of the Government and its instrumentalities.
(f) A mutual fund or an open-end investment company includes an investment company
which is offering for sale or has outstanding, any redeemable security of which it is the
issuer.
(g) A closed-end investment company includes an investment company other than
open-end investment company.
(h) A common trust fund includes a fund maintained by an entity authorized to perform
trust functions under a written and formally established plan, exclusively for the
collective investment and reinvestment of certain money representing participation in
the plan received by it in its capacity as trustee, for the purpose of administration,
holding or management of such funds and/or properties for the use, benefit or advantage
of the trustor or of others known as beneficiaries.
(i) A pre-need company or issuer includes any corporation supervised and/or regulated
by the SEC and is authorized or licensed to sell or offer for sale pre-need plans. Preneed plans are contracts which provide for the performance of future service(s) or
payment of future monetary consideration at the time of actual need, payable either in
cash or installment by the planholder at prices stated in the contract with or without
interest or insurance coverage and includes life, pension, education, internment and
other plans, which the Commission may, from time to time, approve.
(j) A foreign exchange corporation includes any enterprise which engages or purports
to engage, whether regularly or on an isolated basis, in the sale and purchase of foreign
currency notes and such other foreign-currency denominated non-bank deposit
transactions as may be authorized under its articles of incorporation.
(k) Investment Advisor/Agent/Consultant shall refer to any person:
Appendix 52 - Page 3
APP. 52
03.12.31
(1) who for an advisory fee is engaged in the business of advising others, either
directly or through circulars, reports, publications or writings, as to the value of
any security and as to the advisability of trading in any security; or
(2) who for compensation and as part of a regular business, issues or promulgates,
analyzes reports concerning the capital market, except:
(a) any bank or trust company;
(b) any journalist, reporter, columnist, editor, lawyer, accountant,
teacher;
(c) the publisher of any bonafide newspaper, news, business or financial
publication of general and regular circulation, including their
employees;
(d) any contract market;
(e) such other person not within the intent of this definition, provided
that the furnishing of such service by the foregoing persons is solely
incidental to the conduct of their business or profession.
(3) any person who undertakes the management of portfolio securities of
investment companies, including the arrangement of purchases, sales or
exchanges of securities.
(l) A moneychanger includes any person in the business of buying or selling foreign
currency notes.
(m) A money payment, remittance and transfer company includes any person offering
to pay, remit or transfer or transmit money on behalf of any person to another person.
(n) Customer refers to any person or entity that keeps an account, or otherwise transacts
business, with a covered institution and any person or entity on whose behalf an account
is maintained or a transaction is conducted, as well as the beneficiary of said transactions.
A customer also includes the beneficiary of a trust, an investment fund, a pension fund
or a company or person whose assets are managed by an asset manager, or a grantor of
a trust. It includes any insurance policy holder, whether actual or prospective.
(o) Property includes any thing or item of value, real or personal, tangible or intangible,
or any interest therein or any benefit, privilege, claim or right with respect thereto.
Rule 3.b. COVERED TRANSACTION IS A TRANSACTION IN CASH OR OTHER
EQUIVALENT MONETARY INSTRUMENT INVOLVING A TOTAL AMOUNT IN EXCESS OF
FIVE HUNDRED THOUSAND PESOS (PHP500,000.00) WITHIN ONE (1) BANKING DAY.
Rule 3.b.1. SUSPICIOUS TRANSACTIONS ARE TRANSACTIONS, REGARDLESS OF
AMOUNT, WHERE ANY OF THE FOLLOWING CIRCUMSTANCES EXISTS:
(1) THERE IS NO UNDERLYING LEGAL OR TRADE OBLIGATION, PURPOSE OR
ECONOMIC JUSTIFICATION;
Appendix 52 - Page 4
APP. 52
03.12.31
Appendix 52 - Page 5
APP. 52
03.12.31
Appendix 52 - Page 6
APP. 52
03.12.31
(16)
(17)
(18)
(19)
Appendix 52 - Page 7
APP. 52
03.12.31
Appendix 52 - Page 8
APP. 52
03.12.31
(K) Violations under Republic Act No. 8792, otherwise known as the Electronic Commerce
Act of 2000;
K.1. Hacking or cracking, which refers to:
(55) unauthorized access into or interference in a computer system/server or
information and communication system; or
(56) any access in order to corrupt, alter, steal, or destroy using a computer or other
similar information and communication devices, without the knowledge and
consent of the owner of the computer or information and communications
system, including
(57) the introduction of computer viruses and the like, resulting in the corruption,
destruction, alteration, theft or loss of electronic data messages or electronic
document;
K.2. Piracy, which refers to:
(58)
(59)
(60)
(61)
(62)
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K.3. Violations of the Consumer Act or Republic Act No. 7394 and other relevant or
pertinent laws through transactions covered by or using electronic data messages or
electronic documents:
(64) Sale of any consumer product that is not in conformity with standards under
the Consumer Act;
(65) Sale of any product that has been banned by a rule under the Consumer Act;
(66) Sale of any adulterated or mislabeled product using electronic documents;
(67) Adulteration or misbranding of any consumer product;
(68) Forging, counterfeiting or simulating any mark, stamp, tag, label or other
identification device;
(69) Revealing trade secrets;
(70) Alteration or removal of the labeling of any drug or device held for sale;
(71) Sale of any drug or device not registered in accordance with the provisions of
the E-Commerce Act;
(72) Sale of any drug or device by any person not licensed in accordance with the
provisions of the E-Commerce Act;
(73) Sale of any drug or device beyond its expiration date;
(74) Introduction into commerce of any mislabeled or banned hazardous substance;
(75) Alteration or removal of the labeling of a hazardous substance;
(76) Deceptive sales acts and practices;
(77) Unfair or unconscionable sales acts and practices;
(78) Fraudulent practices relative to weights and measures;
(79) False representations in advertisements as the existence of a warranty or
guarantee;
(80) Violation of price tag requirements;
(81) Mislabeling consumer products;
(82) False, deceptive or misleading advertisements;
(83) Violation of required disclosures on consumer loans;
(84) Other violations of the provisions of the E-Commerce Act;
(L) Hijacking and other violations under Republic Act No. 6235; destructive arson and
murder, as defined under the Revised Penal Code, as amended, including those
perpetrated by terrorists against non-combatant persons and similar targets;
(85)
(86)
(87)
(88)
Hijacking;
Destructive arson;
Murder;
Hijacking, destructive arson or murder perpetrated by terrorists against noncombatant persons and similar targets;
(M) Fraudulent practices and other violations under Republic Act No. 8799, otherwise
known as the Securities Regulation Code of 2000;
(89) Sale, offer or distribution of securities within the Philippines without a registration
statement duly filed with and approved by the SEC;
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(90) Sale or offer to the public of any pre-need plan not in accordance with the
rules and regulations which the SEC shall prescribe;
(91) Violation of reportorial requirements imposed upon issuers of securities;
(92) Manipulation of security prices by creating a false or misleading appearance of
active trading in any listed security traded in an Exchange or any other trading
market;
(93) Manipulation of security prices by effecting, alone or with others, a series of
transactions in securities that raises their prices to induce the purchase of a
security, whether of the same or different class, of the same issuer or of a
controlling, controlled or commonly controlled company by others;
(94) Manipulation of security prices by effecting, alone or with others, a series of
transactions in securities that depresses their price to induce the sale of a security,
whether of the same or different class, of the same issuer or of a controlling,
controlled or commonly controlled company by others;
(95) Manipulation of security prices by effecting, alone or with others, a series of
transactions in securities that creates active trading to induce such a purchase
or sale though manipulative devices such as marking the close, painting the
tape, squeezing the float, hype and dump, boiler room operations and such
other similar devices;
(96) Manipulation of security prices by circulating or disseminating information that
the price of any security listed in an Exchange will or is likely to rise or fall
because of manipulative market operations of any one or more persons
conducted for the purpose of raising or depressing the price of the security for
the purpose of inducing the purchase or sale of such security;
(97) Manipulation of security prices by making false or misleading statements with
respect to any material fact, which he knew or had reasonable ground to believe
was so false and misleading, for the purpose of inducing the purchase or sale
of any security listed or traded in an Exchange;
(98) Manipulation of security prices by effecting, alone or with others, any series of
transactions for the purchase and/or sale of any security traded in an Exchange
for the purpose of pegging, fixing or stabilizing the price of such security, unless
otherwise allowed by the Securities Regulation Code or by the rules of the
SEC;
(99) Sale or purchase of any security using any manipulative deceptive device or
contrivance;
(100) Execution of short sales or stop-loss order in connection with the purchase or
sale of any security not in accordance with such rules and regulations as the
SEC may prescribe as necessary and appropriate in the public interest or the
protection of the investors;
(101) Employment of any device, scheme or artifice to defraud in connection with
the purchase and sale of any securities;
(102) Obtaining money or property in connection with the purchase and sale of any
security by means of any untrue statement of a material fact or any omission to
state a material fact necessary in order to make the statements made, in the
light of the circumstances under which they were made, not misleading;
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03.12.31
(103) Engaging in any act, transaction, practice or course of action in the sale and
purchase of any security which operates or would operate as a fraud or deceit
upon any person;
(104) Insider trading;
(105) Engaging in the business of buying and selling securities in the Philippines as a
broker or dealer, or acting as a salesman, or an associated person of any broker
or dealer without any registration from the Commission;
(106) Employment by a broker or dealer of any salesman or associated person or by
an issuer of any salesman, not registered with the SEC;
(107) Effecting any transaction in any security, or reporting such transaction, in an
Exchange or using the facility of an Exchange which is not registered with the
SEC;
(108) Making use of the facility of a clearing agency which is not registered with the
SEC;
(109) Violations of margin requirements;
(110) Violations on the restrictions on borrowings by members, brokers and dealers;
(111) Aiding and Abetting in any violations of the Securities Regulation Code;
(112) Hindering, obstructing or delaying the filing of any document required under
the Securities Regulation Code or the rules and regulations of the SEC;
(113) Violations of any of the provisions of the implementing rules and regulations of
the SEC;
(114) Any other violations of any of the provisions of the Securities Regulation Code.
(N) Felonies or offenses of a similar nature to the afore-mentioned unlawful activities
that are punishable under the penal laws of other countries.
In determining whether or not a felony or offense punishable under the penal laws of
other countries, is of a similar nature, as to constitute the same as an unlawful activity
under the AMLA, the nomenclature of said felony or offense need not be identical to
any of the predicate crimes listed under Rule 3.i.
RULE 4
Money Laundering Offense
Rule 4.1. Money Laundering Offense - Money laundering is a crime whereby the proceeds of
an unlawful activity AS HEREIN DEFINED are transacted, thereby making them appear to
have originated from legitimate sources. It is committed by the following:
(a) Any person knowing that any monetary instrument or property represents, involves, or
relates to, the proceeds of any unlawful activity, transacts or attempts to transact said monetary
instrument or property.
(b) Any person knowing that any monetary instrument or property involves the proceeds of
any unlawful activity, performs or fails to perform any act as a result of which he facilitates the
offense of money laundering referred to in paragraph (a) above.
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(c) Any person knowing that any monetary instrument or property is required under this Act to
be disclosed and filed with the Anti-Money Laundering Council (AMLC), fails to do so.
RULE 5
Jurisdiction of Money Laundering Cases and
Money Laundering Investigation Procedures
Rule 5.1. Jurisdiction of Money Laundering Cases. - The Regional Trial Courts shall have the
jurisdiction to try all cases on money laundering. Those committed by public officers and
private persons who are in conspiracy with such public officers shall be under the jurisdiction
of the Sandiganbayan.
Rule 5.2. Investigation of Money Laundering Offenses. - The AMLC shall investigate:
(a) SUSPICIOUS TRANSACTIONS;
(b) COVERED TRANSACTIONS DEEMED SUSPICIOUS AFTER AN INVESTIGATION
CONDUCTED BY THE AMLC;
(c) MONEY LAUNDERING ACTIVITIES; AND
(d) OTHER VIOLATIONS OF THIS ACT.
Rule 5.3. Attempts at Transactions. Section 4 (a) and (b) of the AMLA provides that any person
who attempts to transact any monetary instrument or property representing, involving or relating
to the proceeds of any unlawful activity shall be prosecuted for a money laundering offense.
Accordingly, the reports required under Rule 9.3 (a) and (b) of these Rules shall include those
pertaining to any attempt by any person to transact any monetary instrument or property
representing, involving or relating to the proceeds of any unlawful activity.
RULE 6
Prosecution of Money Laundering
Rule 6.1. Prosecution of Money Laundering. (a) Any person may be charged with and convicted of both the offense of money laundering
and the unlawful activity as defined under Rule 3 (i) of the AMLA.
(b) Any proceeding relating to the unlawful activity shall be given precedence over the
prosecution of any offense or violation under the AMLA without prejudice to the APPLICATION
EX-PARTE by the AMLC TO THE COURT OF APPEALS FOR A FREEZE ORDER with respect to
the MONETARY INSTRUMENT OR PROPERTY involved therein and resort to other remedies
provided under the AMLA, THE RULES OF COURT AND OTHER PERTINENT LAWS AND
RULES.
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Rule 6.2. When the AMLC finds, after investigation, that there is probable cause to charge any
person with a money laundering offense under Section 4 of the AMLA, it shall cause a complaint
to be filed, pursuant to Section 7 (4) of the AMLA, before the Department of Justice or the
Ombudsman, which shall then conduct the preliminary investigation of the case.
Rule 6.3. After due notice and hearing in the preliminary investigation proceedings before the
Department of Justice, or the Ombudsman, as the case may be, and the latter should find
probable cause of a money laundering offense, it shall file the necessary information before
the Regional Trial Courts or the Sandiganbayan.
Rule 6.4. Trial for the money laundering offense shall proceed in accordance with the Code of
Criminal Procedure or the Rules of Procedure of the Sandiganbayan, as the case may be.
Rule 6.5. Knowledge of the offender that any monetary instrument or property represents,
involves, or relates to the proceeds of an unlawful activity or that any monetary instrument or
property is required under the AMLA to be disclosed and filed with the AMLC, may be
established by direct evidence or inferred from the attendant circumstances.
Rule 6.6. All the elements of every money laundering offense under Section 4 of the AMLA
must be proved by evidence beyond reasonable doubt, including the element of knowledge
that the monetary instrument or property represents, involves or relates to the proceeds of any
unlawful activity.
Rule 6.7. No element of the unlawful activity, however, including the identity of the perpetrators
and the details of the actual commission of the unlawful activity need be established by proof
beyond reasonable doubt. The elements of the offense of money laundering are separate and
distinct from the elements of the felony or offense constituting the unlawful activity.
RULE 7
Creation of Anti-Money Laundering Council (AMLC)
Rule 7.1.a. Composition. - The Anti-Money Laundering Council is hereby created and shall be
composed of the Governor of the Bangko Sentral ng Pilipinas as Chairman, the Commissioner
of the Insurance Commission and the Chairman of the Securities and Exchange Commission
as members.
Rule 7.1.b. Unanimous Decision. - The AMLC shall act unanimously in discharging its functions
as defined in the AMLA and in these Rules. However, in the case of the incapacity, absence or
disability of any member to discharge his functions, the officer duly designated or authorized
to discharge the functions of the Governor of the BSP, the Chairman of the SEC or the Insurance
Commissioner, as the case may be, shall act in his stead in the AMLC.
Rule 7.2. Functions. - The functions of the AMLC are defined hereunder:
(1) to require and receive covered OR SUSPICIOUS transaction reports from covered institutions;
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03.12.31
(2) to issue orders addressed to the appropriate Supervising Authority or the covered institution
to determine the true identity of the owner of any monetary instrument or property subject of
a covered OR SUSPICIOUS transaction report, or request for assistance from a foreign State,
or believed by the Council, on the basis of substantial evidence, to be, in whole or in part,
wherever located, representing, involving, or related to, directly or indirectly, in any manner
or by any means, the proceeds of an unlawful activity;
(3) to institute civil forfeiture proceedings and all other remedial proceedings through the
Office of the Solicitor General;
(4) to cause the filing of complaints with the Department of Justice or the Ombudsman for the
prosecution of money laundering offenses;
(5) TO INVESTIGATE SUSPICIOUS TRANSACTIONS AND COVERED TRANSACTIONS
DEEMED SUSPICIOUS AFTER AN INVESTIGATION BY THE AMLC, money laundering
activities and other violations of this Act;
(6) TO APPLY BEFORE THE COURT OF APPEALS, EX-PARTE, FOR THE FREEZING OF any
monetary instrument or property alleged to be proceeds of any unlawful activity AS DEFINED
UNDER SECTION 3(i) HEREOF;
(7) to implement such measures as may be inherent, necessary, implied, incidental and justified
under the AMLA to counteract money laundering. Subject to such limitations as provided for
by law, the AMLC is authorized under Rule 7 (7) of the AMLA to establish an information
sharing system that will enable the AMLC to store, track and analyze money laundering
transactions for the resolute prevention, detection and investigation of money laundering
offenses. For this purpose, the AMLC shall install a computerized system that will be used in
the creation and maintenance of an information database;
(8) to receive and take action in respect of any request from foreign states for assistance in their
own anti-money laundering operations as provided in the AMLA. The AMLC is authorized
under Sections 7 (8) and 13 (b) and (d) of the AMLA to receive and take action in respect of any
request of foreign states for assistance in their own anti-money laundering operations, in respect
of conventions, resolutions and other directives of the United Nations (UN), the UN Security
Council, and other international organizations of which the Philippines is a member. However,
the AMLC may refuse to comply with any such request, convention, resolution or directive
where the action sought therein contravenes the provisions of the Constitution, or the execution
thereof is likely to prejudice the national interest of the Philippines.
(9) to develop educational programs on the pernicious effects of money laundering, the methods
and techniques used in money laundering, the viable means of preventing money laundering
and the effective ways of prosecuting and punishing offenders.
(10) to enlist the assistance of any branch, department, bureau, office, agency or instrumentality
of the government, including government-owned and -controlled corporations, in undertaking
any and all anti-money laundering operations, which may include the use of its personnel,
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03.12.31
facilities and resources for the more resolute prevention, detection and investigation of money
laundering offenses and prosecution of offenders. The AMLC may require the intelligence
units of the Armed Forces of the Philippines, the Philippine National Police, the Department
of Finance, the Department of Justice, as well as their attached agencies, and other domestic
or transnational governmental or non-governmental organizations or groups to divulge to the
AMLC all information that may, in any way, facilitate the resolute prevention, investigation
and prosecution of money laundering offenses and other violations of the AMLA.
(11) TO IMPOSE ADMINISTRATIVE SANCTIONS FOR THE VIOLATION OF LAWS, RULES,
REGULATIONS AND ORDERS AND RESOLUTIONS ISSUED PURSUANT THERETO.
Rule 7.3. Meetings. - The AMLC shall meet every first Monday of the month, or as often as may
be necessary at the call of the Chairman.
RULE 8
Creation of a Secretariat
Rule 8.1. The Executive Director. - The Secretariat shall be headed by an Executive Director
who shall be appointed by the AMLC for a term of five (5) years. He must be a member of the
Philippine Bar, at least thirty-five (35) years of age, must have served at least five (5) years
either at the BSP, the SEC or the IC and of good moral character, unquestionable integrity and
known probity. He shall be considered a regular employee of the BSP with the rank of Assistant
Governor, and shall be entitled to such benefits and subject to such rules and regulations, as
well as prohibitions, as are applicable to officers of similar rank.
Rule 8.2. Composition. - In organizing the Secretariat, the AMLC may choose from those who
have served, continuously or cumulatively, for at least five (5) years in the BSP, the SEC or the
IC. All members of the Secretariat shall be considered regular employees of the BSP and shall
be entitled to such benefits and subject to such rules and regulations as are applicable to BSP
employees of similar rank.
Rule 8.3. Detail and Secondment. - The AMLC is authorized under Section 7 (10) of the AMLA
to enlist the assistance of the BSP, the SEC or the IC, or any other branch, department, bureau,
office, agency or instrumentality of the government, including government-owned and
controlled corporations, in undertaking any and all anti-money laundering operations. This
includes the use of any member of their personnel who may be detailed or seconded to the
AMLC, subject to existing laws and Civil Service Rules and Regulations. Detailed personnel
shall continue to receive their salaries, benefits and emoluments from their respective mother
units. Seconded personnel shall receive, in lieu of their respective compensation packages
from their respective mother units, the salaries, emoluments and all other benefits to which
their AMLC Secretariat positions are entitled to.
Rule 8.4. Confidentiality Provisions. - The members of the AMLC, the Executive Director, and
all the members of the Secretariat, whether permanent, on detail or on secondment, shall not
reveal, in any manner, any information known to them by reason of their office. This prohibition
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shall apply even after their separation from the AMLA. In case of violation of this provision, the
person shall be punished in accordance with the pertinent provisions of the Central Bank Act.
RULE 9
Prevention of Money Laundering;
Customer Identification Requirements and Record Keeping
Rule 9.1. Customer Identification Requirements
Rule 9.1.a. Customer Identification. - Covered institutions shall establish and record the
true identity of its clients based on official documents. They shall maintain a system of verifying
the true identity of their clients and, in case of corporate clients, require a system of verifying
their legal existence and organizational structure, as well as the authority and identification of
all persons purporting to act on their behalf. Covered institutions shall establish appropriate
systems and methods based on internationally compliant standards and adequate internal
controls for verifying and recording the true and full identity of their customers.
Rule 9.1.b. Trustee, Nominee and Agent Accounts. - When dealing with customers who
are acting as trustee, nominee, agent or in any capacity for and on behalf of another, covered
institutions shall verify and record the true and full identity of the person(s) on whose behalf a
transaction is being conducted. Covered institutions shall also establish and record the true
and full identity of such trustees, nominees, agents and other persons and the nature of their
capacity and duties. In case a covered institution has doubts as to whether such persons are
being used as dummies in circumvention of existing laws, it shall immediately make the
necessary inquiries to verify the status of the business relationship between the parties.
Rule 9.1.c. Minimum Information/Documents Required for Individual Customers. Covered institutions shall require customers to produce original documents of identity issued
by an official authority, bearing a photograph of the customer. Examples of such documents
are identity cards and passports. The following minimum information/documents shall be
obtained from individual customers:
1)
2)
3)
4)
5)
6)
7)
8)
9)
10)
11)
Name;
Present address;
Permanent address;
Date and place of birth;
Nationality;
Nature of work and name of employer or nature of self-employment/business;
Contact numbers;
Tax identification number, Social Security System number or Government
Service and Insurance System number;
Specimen signature;
Source of fund(s); and
Names of beneficiaries in case of insurance contracts and whenever applicable.
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Articles of Incorporation/Partnership;
By-laws;
Official address or principal business address;
List of directors/partners;
List of principal stockholders owning at least two percent (2%) of the capital
stock;
Contact numbers;
Beneficial owners, if any; and
Verification of the authority and identification of the person purporting to act
on behalf of the client.
Rule 9.1.e. Prohibition against Certain Accounts. Covered institutions shall maintain
accounts only in the true and full name of the account owner or holder. The provisions of
existing laws to the contrary notwithstanding, anonymous accounts, accounts under fictitious
names, and all other similar accounts shall be absolutely prohibited.
Rule 9.1.f. Prohibition against opening of Accounts without Face-to-face Contact. - No
new accounts shall be opened and created without face-to-face contact and full compliance
with the requirements under Rule 9.1.c of these Rules.
Rule 9.1.g. Numbered Accounts. - Peso and foreign currency non-checking numbered
accounts shall be allowed: Provided, That the true identity of the customers of all peso and
foreign currency non-checking numbered accounts are satisfactorily established based on official
and other reliable documents and records, and that the information and documents required
under the provisions of these Rules are obtained and recorded by the covered institution. No
peso and foreign currency non-checking accounts shall be allowed without the establishment
of such identity and in the manner herein provided. The BSP may conduct annual testing for
the purpose of determining the existence and true identity of the owners of such accounts. The
SEC and the IC may conduct similar testing more often than once a year and covering such
other related purposes as may be allowed under their respective charters.
Rule 9.2. Record Keeping Requirements
Rule 9.2.a. Record Keeping: Kinds of Records and Period for Retention. All records of
all transactions of covered institutions shall be maintained and safely stored for five (5) years
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from the dates of transactions. Said records and files shall contain the full and true identity of
the owners or holders of the accounts involved in the covered transactions and all other
customer identification documents. Covered institutions shall undertake the necessary adequate
security measures to ensure the confidentiality of such file. Covered institutions shall prepare
and maintain documentation, in accordance with the aforementioned client identification
requirements, on their customer accounts, relationships and transactions such that any account,
relationship or transaction can be so reconstructed as to enable the AMLC, and/or the courts to
establish an audit trail for money laundering.
Rule 9.2.b. Existing and New Accounts and New Transactions. - All records of existing
and new accounts and of new transactions shall be maintained and safely stored for five (5)
years from October 17, 2001 or from the dates of the accounts or transactions, whichever is
later.
Rule 9.2.c. Closed Accounts. With respect to closed accounts, the records on customer
identification, account files and business correspondence shall be preserved and safely stored
for at least five (5) years from the dates when they were closed.
Rule 9.2.d. Retention of Records in Case a Money Laundering Case has been Filed in
Court. If a money laundering case based on any record kept by the covered institution
concerned has been filed in court, said file must be retained beyond the period stipulated in
the three (3) immediately preceding sub-Rules, as the case may be, until it is confirmed that
the case has been finally resolved or terminated by the court.
Rule 9.2.e. Form of Records. Records shall be retained as originals in such forms as are
admissible in court pursuant to existing laws and the applicable rules promulgated by the
Supreme Court.
Rule 9.3. Reporting of Covered Transactions.
Rule 9.3.a. Period of Reporting Covered Transactions and SuspiciousTransactions. COVERED INSTITUTIONS SHALL REPORT TO THE AMLC ALL COVERED TRANSACTIONS
AND SUSPICIOUS TRANSACTIONS WITHIN FIVE (5) WORKING DAYS FROM
OCCURRENCE THEREOF, UNLESS THE SUPERVISING AUTHORITY CONCERNED
PRESCRIBES A LONGER PERIOD NOT EXCEEDING TEN (10) WORKING DAYS.
SHOULD A TRANSACTION BE DETERMINED TO BE BOTH A COVERED AND A
SUSPICIOUS TRANSACTION, THE COVERED INSTITUTION SHALL REPORT THE SAME
AS A SUSPICIOUS TRANSACTION.
THE REPORTING OF COVERED TRANSACTIONS BY COVERED INSTITUTIONS SHALL
BE DEFERRED FOR A PERIOD OF SIXTY (60) DAYS AFTER THE EFFECTIVITY OF REPUBLIC
ACT NO. 9194, OR AS MAY BE DETERMINED BY THE AMLC, IN ORDER TO ALLOW THE
COVERED INSTITUTIONS TO CONFIGURE THEIR RESPECTIVE COMPUTER SYSTEMS;
PROVIDED THAT, ALL COVERED TRANSACTIONS DURING SAID DEFERMENT PERIOD
SHALL BE SUBMITTED THEREAFTER.
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Rule 9.3.b. Covered AND SUSPICIOUS Transaction Report Forms. - The Covered
Transaction Report (CTR) AND THE SUSPICIOUS TRANSACTION REPORT (STR) shall be in
the forms prescribed by the AMLC.
Rule 9.3.b.1. COVERED INSTITUTIONS SHALL USE THE EXISTING FORMS FOR
COVERED TRANSACTION REPORTS AND SUSPICIOUS TRANSACTION REPORTS, UNTIL
SUCH TIME AS THE AMLC HAS ISSUED NEW SETS OF FORMS.
Rule 9.3.b.2. COVERED TRANSACTION REPORTS AND SUSPICIOUS
TRANSACTION REPORTS SHALL BE SUBMITTED IN A SECURED MANNER TO THE AMLC
IN ELECTRONIC FORM, EITHER VIA DISKETTES, LEASED LINES, OR THROUGH INTERNET
FACILITIES, WITH THE CORRESPONDING HARD COPY FOR SUSPICIOUS
TRANSACTIONS. THE FINAL FLOW AND PROCEDURES FOR SUCH REPORTING SHALL
BE MAPPED OUT IN THE MANUAL OF OPERATIONS TO BE ISSUED BY THE AMLC.
Rule 9.3.c. Exemption from Bank Secrecy Laws. When reporting covered OR
SUSPICIOUS transactions to the AMLC, covered institutions and their officers and employees,
shall not be deemed to have violated R.A. No. 1405, as amended, R.A. No. 6426, as amended,
R.A. No. 8791 and other similar laws, but are prohibited from communicating, directly or
indirectly, in any manner or by any means, to any person the fact that a covered or suspicious
transaction report was made, the contents thereof, or any other information in relation thereto.
In case of violation thereof, the concerned officer and employee of the covered institution,
shall be criminally liable.
Rule 9.3.d. Confidentiality Provisions. When reporting covered transactions or suspicious
transactions to the AMLC, covered institutions and their officers, employees, representatives,
agents, advisors, consultants or associates are prohibited from communicating, directly or
indirectly, in any manner or by any means, to any person, entity, or the media, the fact that a
covered transaction report was made, the contents thereof, or any other information in relation
thereto. Neither may such reporting be published or aired in any manner or form by the mass
media, electronic mail, or other similar devices. In case of violation hereof, the concerned
officer, employee, representative, agent, advisor, consultant or associate of the covered
institution, or media shall be held criminally liable.
Rule 9.3.e. Safe Harbor Provisions. No administrative, criminal or civil proceedings,
shall lie against any person for having made a covered transaction report OR A SUSPICIOUS
transaction report in the regular performance of his duties and in good faith, whether or not
such reporting results in any criminal prosecution under this Act or any other Philippine law.
RULE 10
APPLICATION FOR FREEZE ORDERS
Rule 10.1. WHEN THE AMLC MAY APPLY FOR THE FREEZING OF ANY MONETARY
INSTRUMENT OR PROPERTY. (a) AFTER AN INVESTIGATION CONDUCTED BY THE AMLC AND UPON DETERMINATION
THAT PROBABLE CAUSE EXISTS THAT A MONETARY INSTRUMENT OR PROPERTY IS IN
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03.12.31
ANY WAY RELATED TO ANY UNLAWFUL ACTIVITY AS DEFINED UNDER SECTION 3 (i),
THE AMLC MAY FILE AN EX-PARTE APPLICATION BEFORE THE COURT OF APPEALS FOR
THE ISSUANCE OF A FREEZE ORDER ON ANY MONETARY INSTRUMENT OR PROPERTY
subject thereof prior to the institution or in the course of, the criminal proceedings involving
the unlawful activity to which said MONETARY INSTRUMENT OR PROPERTY is any way
related.
(b) Considering the intricate and diverse web of related and interlocking accounts PERTAINING
TO THE MONETARY INSTRUMENT(S) OR PROPERTY(IES) that any person may create in the
different covered institutions, their branches and/or other units, the AMLC may APPLY TO
THE COURT OF APPEALS FOR THE FREEZING, NOT ONLY OF THE MONETARY
INSTRUMENTS OR PROPERTIES IN THE NAMES OF THE REPORTED OWNER(S)/HOLDER(S),
AND MONETARY INSTRUMENTS OR PROPERTIES NAMED IN THE APPLICATION OF
THE AMLC BUT ALSO ALL OTHER RELATED WEB OF ACCOUNTS PERTAINING TO OTHER
MONETARY INSTRUMENTS AND PROPERTIES, THE FUNDS AND SOURCES OF WHICH
ORIGINATED FROM OR ARE RELATED TO THE MONETARY INSTRUMENT(S) OR
PROPERTY(IES) SUBJECT OF THE FREEZE ORDER(S).
(c) THE FREEZE ORDER SHALL BE EFFECTIVE FOR TWENTY (20) DAYS UNLESS EXTENDED
BY THE COURT OF APPEALS UPON APPLICATION BY THE AMLC.
Rule 10.2. Definition of Probable Cause. - Probable cause includes such facts and circumstances
which would lead a reasonably discreet, prudent or cautious man to believe that an unlawful
activity and/or a money laundering offense is about to be, is being or has been committed and
that the account or any monetary instrument or property subject thereof sought to be frozen is
in any way related to said unlawful activity and/or money laundering offense.
Rule 10.3. DUTY OF COVERED INSTITUTION UPON RECEIPT THEREOF.
Rule 10.3.a. Upon receipt of the notice of the freeze order, the covered institution
concerned shall immediately freeze the monetary instrument or property AND RELATED WEB
OF ACCOUNTS subject thereof.
Rule 10.3.b. THE COVERED INSTITUTION SHALL LIKEWISE IMMEDIATELY FURNISH
A COPY OF THE NOTICE OF THE FREEZE ORDER UPON THE OWNER OR HOLDER OF
THE MONETARY INSTRUMENT OR PROPERTY OR RELATED WEB OF ACCOUNTS SUBJECT
THEREOF.
Rule 10.3.c. Within twenty-four (24) hours from receipt of the freeze order, tile covered
institution concerned shall submit to the COURT OF APPEALS AND THE AMLC, by personal
delivery, a detailed written return on the freeze order, specifying ALL THE PERTINENT AND
RELEVANT INFORMATION WHICH SHALL INCLUDE THE FOLLOWING:
1. THE ACCOUNT NUMBER(S);
2. THE NAME(S) OF THE ACCOUNT OWNER(S) OR HOLDER(S);
3. THE AMOUNT OF THE MONETARY INSTRUMENT, PROPERTY OR RELATED WEB
OF ACCOUNTS AS OF THE TIME THEY WERE FROZEN;
Appendix 52 - Page 21
APP. 52
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Appendix 52 - Page 22
APP. 52
03.12.31
SUBSIDIARIES AND AFFILIATES upon order of any competent court in cases of violation of
this Act, when it has been established that there is probable cause that the deposits or investments
involved are related to AN UNLAWFUL ACTIVITY AS DEFINED IN SECTION 3 (i) HEREOF
OR a money laundering offense UNDER SECTION 4 HEREOF; EXCEPT IN CASES AS
PROVIDED UNDER RULE 11.2.
Rule 11.2. Authority to Inquire into Bank Deposits WITHOUT COURT ORDER. - The AMLC
MAY INQUIRE INTO OR EXAMINE DEPOSIT AND INVESTMENTS WITH ANY BANKING
INSTITUTION OR NON-BANK FINANCIAL INSTITUTION AND THEIR SUBSIDIARIES AND
AFFILIATES WITHOUT A COURT ORDER WHERE ANY OF THE FOLLOWING UNLAWFUL
ACTIVITIES ARE INVOLVED:
(a) Kidnapping for ransom under Article 267 of Act No. 3815, otherwise known as the Revised
Penal Code, as amended;
(b) Sections 4,5,6, 8, 9, 10. 12, 13, 14, 15 AND 16 of Republic Act No. 9165, otherwise
known as the COMPREHENSIVE Dangerous Drugs Act of 2002;
(c) Hijacking and other violations under Republic Act No. 6235; destructive arson and murder,
as defined under the Revised Penal Code, as amended, including those perpetrated by terrorists
against noncombatant persons and similar targets
Rule 11.2.a. PROCEDURE FOR EXAMINATION WITHOUT A COURT ORDER. - WHERE
ANY OF THE UNLAWFUL ACTIVITIES ENUMERATED UNDER THE IMMEDIATELY
PRECEDING RULE 11.2 ARE INVOLVED, AND THERE IS PROBABLE CAUSE THAT THE
DEPOSITS OR INVESTMENTS WITH ANY BANKING OR NON-BANKING FINANCIAL
INSTITUTION AND THEIR SUBSIDIARIES AND AFFILIATES ARE IN ANYWAY RELATED
TO THESE UNLAWFUL ACTIVITIES THE AMLC SHALL ISSUE A RESOLUTION
AUTHORIZING THE INQUIRY INTO OR EXAMINATION OF ANY DEPOSIT OR
INVESTMENT WITH SUCH BANKING OR NON-BANKING FINANCIAL INSTITUTION AND
THEIR SUBSIDIARIES AND AFFILIATES CONCERNED.
Rule 11.2.b. DUTY OF THE BANKING INSTITUTION OR NON- BANKING
INSTITUTION UPON RECEIPT OF THE AMLC RESOLUTION. - THE BANKING INSTITUTION
OR THE NON-BANKING FINANCIAL INSTITUTION AND THEIR SUBSIDIARIES AND
AFFILIATES SHALL, IMMEDIATELY UPON RECEIPT OF THE AMLC RESOLUTION, ALLOW
THE AMLC AND/OR ITS AUTHORIZED REPRESENTATIVE(S) FULL ACCESS TO ALL
RECORDS PERTAINING TO THE DEPOSIT OR INVESTMENT ACCOUNT.
Rule 11.3. - BSP Authority to Examine deposits and investments; Additional Exception to the
Bank Secrecy Act. - TO ENSURE COMPLIANCE WITH THIS ACT, THE BANGKO SENTRAL
NG PILIPINAS (BSP) MAY INQUIRE INTO OR EXAMINE ANY PARTICULAR DEPOSIT OR
INVESTMENT WITH ANY BANKING INSTITUTION OR NON-BANK FINANCIAL
INSTITUTION AND THEIR SUBSIDIARIES AND AFFILIATES WHEN THE EXAMINATION
IS MADE IN THE COURSE OF A PERIODIC OR SPECIAL EXAMINATION, IN ACCORDANCE
WITH THE RULES OF EXAMINATION OF THE BSP.
Appendix 52 - Page 23
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03.12.31
Rule 11.3.a. BSP Rules of Examination. - THE BSP SHALL PROMULGATE ITS RULES OF
EXAMINATION FOR ENSURING COMPLIANCE BY BANKS AND NON-BANK FINANCIAL
INSTITUTIONS AND THEIR SUBSIDIARIES AND AFFILIATES WITH THE AMLA AND THESE
RULES.
ANY FINDINGS OF THE BSP WHICH MAY CONSTITUTE A VIOLATION OF ANY
PROVISION OF THIS ACT SHALL BE TRANSMITTED TO THE
AMLC FOR APPROPRIATE ACTION.
RULE 12
Forfeiture Provisions
Rule 12.1. Authority to Institute Civil Forfeiture Proceedings. The AMLC is authorized
under Section 7 (3) of the AMLA to institute civil forfeiture proceedings and all other remedial
proceedings through the Office of the Solicitor General.
Rule 12.2. When Civil Forfeiture May be Applied. When there is a SUSPICIOUS
TRANSACTION REPORT OR A COVERED TRANSACTION REPORT DEEMED SUSPICIOUS
AFTER INVESTIGATION BY THE AMLC, and the court has, in a petition filed for the purpose,
ordered the seizure of any monetary instrument or property, in whole or in part, directly or
indirectly, related to said report, the Revised Rules of Court on civil forfeiture shall apply.
Rule 12.3. Claim on Forfeited Assets. - Where the court has issued an order of forfeiture
of the monetary instrument or property in a criminal prosecution for any money laundering
offense under Section 4 of the AMLA, the offender or any other person claiming an interest
therein may apply, by verified petition, for a declaration that the same legitimately belongs to
him, and for segregation or exclusion of the monetary instrument or property corresponding
thereto. The verified petition shall be filed with the court which rendered the judgment of
conviction and order of forfeiture within fifteen (15) days from the date of the order of forfeiture,
in default of which the said order shall become final and executory. This provision shall apply
in both civil and criminal forfeiture.
Rule 12.4. Payment in lieu of Forfeiture. - Where the court has issued an order of forfeiture of
the monetary instrument or property subject of a money laundering offense under Section 4 of
the AMLA, and said order cannot be enforced because any particular monetary instrument or
property cannot, with due diligence, be located, or it has been substantially altered, destroyed,
diminished in value or otherwise rendered worthless by any act or omission, directly or
indirectly, attributable to the offender, or it has been concealed, removed, converted or
otherwise transferred to prevent the same from being found or to avoid forfeiture thereof, or it
is located outside the Philippines or has been placed or brought outside the jurisdiction of the
court, or it has been commingled with other monetary instruments or property belonging to
either the offender himself or a third person or entity, thereby rendering the same difficult to
identify or be segregated for purposes of forfeiture, the court may, instead of enforcing the
order of forfeiture of the monetary instrument or property or part thereof or interest therein,
accordingly order the convicted offender to pay an amount equal to the value of said monetary
instrument or property. This provision shall apply in both civil and criminal forfeiture.
Appendix 52 - Page 24
APP. 52
03.12.31
RULE 13
Mutual Assistance among States
Rule 13.1. Request for Assistance from a Foreign State. - Where a foreign state makes a
request for assistance in the investigation or prosecution of a money laundering offense, the
AMLC may execute the request or refuse to execute the same and inform the foreign state of
any valid reason for not executing the request or for delaying the execution thereof. The
principles of mutuality and reciprocity shall, for this purpose, be at all times recognized.
Rule 13.2. Powers of the AMLC to Act on a Request for Assistance from a Foreign State. - The
AMLC may execute a request for assistance from a foreign state by: (1) tracking down, freezing,
restraining and seizing assets alleged to be proceeds of any unlawful activity under the
procedures laid down in the AMLA and in these Rules; (2) giving information needed by the
foreign state within the procedures laid down in the AMLA and in these Rules; and (3) applying
for an order of forfeiture of any monetary instrument or property in the court: Provided, That
the court shall not issue such an order unless the application is accompanied by an authenticated
copy of the order of a court in the requesting state ordering the forfeiture of said monetary
instrument or property of a person who has been convicted of a money laundering offense in
the requesting state, and a certification or an affidavit of a competent officer of the requesting
state stating that the conviction and the order of forfeiture are final and that no further appeal
lies in respect of either.
Rule 13.3. Obtaining Assistance from Foreign States. - The AMLC may make a request to any
foreign state for assistance in (1) tracking down, freezing, restraining and seizing assets alleged
to be proceeds of any unlawful activity; (2) obtaining information that it needs relating to any
covered transaction, money laundering offense or any other matter directly or indirectly related
thereto; (3) to the extent allowed by the law of the foreign state, applying with the proper court
therein for an order to enter any premises belonging to or in the possession or control of, any
or all of the persons named in said request, and/or search any or all such persons named
therein and/or remove any document, material or object named in said request: Provided,
That the documents accompanying the request in support of the application have been duly
authenticated in accordance with the applicable law or regulation of the foreign state; and (4)
applying for an order of forfeiture of any monetary instrument or property in the proper court
in the foreign state: Provided, That the request is accompanied by an authenticated copy of the
order of the Regional Trial Court ordering the forfeiture of said monetary instrument or property
of a convicted offender and an affidavit of the clerk of court stating that the conviction and the
order of forfeiture are final and that no further appeal lies in respect of either.
Rule 13.4. Limitations on Requests for Mutual Assistance. - The AMLC may refuse to comply
with any request for assistance where the action sought by the request contravenes any provision
of the Constitution or the execution of a request is likely to prejudice the national interest of
the Philippines, unless there is a treaty between the Philippines and the requesting state relating
to the provision of assistance in relation to money laundering offenses.
Rule 13.5. Requirements for Requests for Mutual Assistance from Foreign States. - A request
for mutual assistance from a foreign state must (1) confirm that an investigation or prosecution
is being conducted in respect of a money launderer named therein or that he has been convicted
Appendix 52 - Page 25
APP. 52
03.12.31
of any money laundering offense; (2) state the grounds on which any person is being investigated
or prosecuted for money laundering or the details of his conviction; (3) give sufficient particulars
as to the identity of said person; (4) give particulars sufficient to identify any covered institution
believed to have any information, document, material or object which may be of assistance to
the investigation or prosecution; (5) ask from the covered institution concerned any information,
document, material or object which may be of assistance to the investigation or prosecution;
(6) specify the manner in which and to whom said information, document, material or object
obtained pursuant to said request, is to be produced; (7) give all the particulars necessary for
the issuance by the court in the requested state of the writs, orders or processes needed by the
requesting state; and (8) contain such other information as may assist in the execution of the
request.
Rule 13.6. Authentication of Documents. - For purposes of Section 13 (f) of the AMLA and
Section 7 of the AMLA, a document is authenticated if the same is signed or certified by a
judge, magistrate or equivalent officer in or of, the requesting state, and authenticated by the
oath or affirmation of a witness or sealed with an official or public seal of a minister, secretary
of state, or officer in or of, the government of the requesting state, or of the person administering
the government or a department of the requesting territory, protectorate or colony. The certificate
of authentication may also be made by a secretary of the embassy or legation, consul general,
consul, vice consul, consular agent or any officer in the foreign service of the Philippines
stationed in the foreign state in which the record is kept, and authenticated by the seal of his
office.
Rule 13.7. Suppletory Application of the Revised Rules of Court.
Rule 13.7.1. For attachment of Philippine properties in the name of persons convicted of
any unlawful activity as defined in Section 3 (i) of the AMLA, execution and satisfaction of
final judgments of forfeiture, application for examination of witnesses, procuring search warrants,
production of bank documents and other materials and all other actions not specified in the
AMLA and these Rules, and assistance for any of the aforementioned actions, which is subject
of a request by a foreign state, resort may be had to the proceedings pertinent thereto under
the Revised Rules of Court.
Rule 13.7.2. Authority to Assist the United Nations and other International Organizations
and Foreign States. The AMLC is authorized under Section 7 (8) and 13 (b) and (d) of the
AMLA to receive and take action in respect of any request of foreign states for assistance in
their own anti-money laundering operations. It is also authorized under Section 7 (7) of the
AMLA to cooperate with the National Government and/or take appropriate action in respect
of conventions, resolutions and other directives of the United Nations (UN), the UN Security
Council, and other international organizations of which the Philippines is a member. However,
the AMLC may refuse to comply with any such request, convention, resolution or directive
where the action sought therein contravenes the provision of the Constitution or the execution
thereof is likely to prejudice the national interest of the Philippines.
Rule 13.8. Extradition. The Philippines shall negotiate for the inclusion of money laundering
offenses as defined under Section 4 of the AMLA among the extraditable offenses in all future
treaties. With respect, however, to the state parties that are signatories to the United Nations
Appendix 52 - Page 26
APP. 52
03.12.31
Convention Against Transnational Organized Crime that was ratified by the Philippine Senate
on October 22, 2001, money laundering is deemed to be included as an extraditable offense
in any extradition treaty existing between said state parties, and the Philippines shall include
money laundering as an extraditable offense in every extradition treaty that may be concluded
between the Philippines and any of said state parties in the future.
RULE 14
Penal Provisions
Rule 14.1. Penalties for the Crime of Money Laundering.
Rule 14.1.a. Penalties under Section 4 (a) of the AMLA. - The penalty of imprisonment
ranging from seven (7) to fourteen (14) years and a fine of not less than Three Million Philippine
Pesos (Php3,000,000.00) but not more than twice the value of the monetary instrument or
property involved in the offense, shall be imposed upon a person convicted under Section 4
(a) of the AMLA.
Rule 14.1.b. Penalties under Section 4 (b) of the AMLA. - The penalty of imprisonment
from four (4) to seven (7) years and a fine of not less than One Million Five Hundred Thousand
Philippine Pesos (Php1,500,000.00) but not more than Three Million Philippine Pesos
(Php3,000,000.00), shall be imposed upon a person convicted under Section 4 (b) of the
AMLA.
Rule 14.1.c. Penalties under Section 4 (c) of the AMLA. - The penalty of imprisonment
from six (6) months to four (4) years or a fine of not less than One Hundred Thousand Philippine
Pesos (Php100,000.00) but not more than Five Hundred Thousand Philippine Pesos
(Php500,000.00), or both, shall be imposed on a person convicted under Section 4(c) of the
AMLA.
Rule 14.1.d. ,Administrative Sanctions. - (1) AFTER DUE NOTICE AND HEARING, THE
AMLC SHALL, AT ITS DISCRETION, IMPOSE FINES UPON ANY COVERED INSTITUTION,
ITS OFFICERS AND EMPLOYEES, OR ANY PERSON WHO VIOLATES ANY OF THE
PROVISIONS OF REPUBLIC ACT NO. 9160, AS AMENDED BY REPUBLIC ACT NO. 9194
AND RULES, REGULATIONS, ORDERS AND RESOLUTIONS ISSUED PURSUANT THERETO.
THE FINES SHALL BE IN AMOUNTS AS MAY BE DETERMINED BY THE COUNCIL, TAKING
INTO CONSIDERATION ALL THE ATTENDANT CIRCUMSTANCES, SUCH AS THE NATURE
AND GRAVITY OF THE VIOLATION OR IRREGULARITY, BUT IN NO CASE SHALL SUCH
FINES BE LESS THAN ONE HUNDRED THOUSAND PESOS (PHP100,000.00) BUT NOT TO
EXCEED FIVE HUNDRED THOUSAND PESOS (PHP500,000.00). THE IMPOSITION OF THE
ADMINISTRATIVE SANCTIONS SHALL BE WITHOUT PREJUDICE TO THE FILING OF
CRIMINAL CHARGES AGAINST THE PERSONS RESPONSIBLE FOR THE VIOLATIONS.
Rule 14.2. Penalties for Failure to Keep Records - The penalty of imprisonment from six (6)
months to one (1) year or a fine of not less than One Hundred Thousand Philippine Pesos
(Php100,000.00) but not more than Five Hundred Thousand Philippine Pesos (Php500,000.00),
or both, shall be imposed on a person convicted under Section 9 (b) of the AMLA.
Appendix 52 - Page 27
APP. 52
03.12.31
Rule 14.3. Penalties for Malicious Reporting. - Any person who, with malice, or in bad faith,
reports or files a completely unwarranted or false information relative to money laundering
transaction against any person shall be subject to a penalty of six (6) months to four (4) years
imprisonment and a fine of not less than One Hundred Thousand Philippine Pesos (Php100,
000.00) but not more than Five Hundred Thousand Philippine Pesos (Php500,000.00), at the
discretion of the court: Provided, That the offender is not entitled to avail the benefits of the
Probation Law.
Rule 14.4. Where Offender is a Juridical Person. - If the offender is a corporation, association,
partnership or any juridical person, the penalty shall be imposed upon the responsible officers,
as the case may be, who participated in, or ALLOWED BY THEIR GROSS NEGLIGENCE the
commission of the crime. If the offender is a juridical person, the court may suspend or revoke
its license. If the offender is an alien, he shall, in addition to the penalties herein prescribed, be
deported without further proceedings after serving the penalties herein prescribed. If the offender
is a public official or employee, he shall, in addition to the penalties prescribed herein, suffer
perpetual or temporary absolute disqualification from office, as the case may be.
Rule 14.5. Refusal by a Public Official or Employee to Testify. - Any public official or employee
who is called upon to testify and refuses to do the same or purposely fails to testify shall suffer
the same penalties prescribed herein.
Rule 14.6. Penalties for Breach of Confidentiality. The punishment of imprisonment ranging
from three (3) to eight (8) years and a fine of not less than Five Hundred Thousand Philippine
Pesos (Php500,000.00) but not more than One Million Philippine Pesos (Php 1,000,000.00),
shall be imposed on a person convicted for a violation under Section 9(c). IN CASE OF A
BREACH OF CONFIDENTIALITY THAT IS PUBLISHED OR REPORTED BY MEDIA, THE
RESPONSIBLE REPORTER, WRITER, PRESIDENT, PUBLISHER, MANAGER AND EDITORIN-CHIEF SHALL BE LIABLE UNDER THIS ACT.
RULE 15
Prohibitions Against Political Harassment
Rule 15.1. Prohibition against Political Persecution. - The AMLA and these Rules shall not be
used for political persecution or harassment or as an instrument to hamper competition in
trade and commerce. No case for money laundering may be filed to the prejudice of a candidate
for an electoral office during an election period.
Rule 15.2. Provisional Remedies Application; Exception.
Rule 15.2.a. - The AMLC may apply, in the course of the criminal proceedings, for
provisional remedies to prevent the monetary instrument or property subject thereof from
being removed, concealed, converted, commingled with other property or otherwise to prevent
its being found or taken by the applicant or otherwise placed or taken beyond the jurisdiction
of the court. However, no assets shall be attached to the prejudice of a candidate for an
electoral office during an election period.
Appendix 52 - Page 28
APP. 52
03.12.31
Rule 15.2.b. - Where there is conviction for money laundering under Section 4 of the
AMLA, the court shall issue a judgment of forfeiture in favor of the Government of the Philippines
with respect to the monetary instrument or property found to be proceeds of one or more
unlawful activities. However, no assets shall be forfeited to the prejudice of a candidate for an
electoral office during an election period.
RULE 16
Restitution
Rule 16. Restitution. - Restitution for any aggrieved party shall be governed by the provisions
of the New Civil Code.
RULE 17
Implementing Rules and Regulations and
Money Laundering Prevention Programs
Rule 17.1. Implementing Rules and Regulations.
(a) Within thirty (30) days from the effectivity of REPUBLIC ACT NO. 9160, as amended by
REPUBLIC ACT NO. 9194, the Bangko Sentral ng Pilipinas, the Insurance Commission and
the Securities and Exchange Commission shall promulgate the Implementing Rules and
Regulations of the AMLA, which shall be submitted to the Congressional Oversight Committee
for approval.
(b) The Supervising Authorities, the BSP, the SEC and the IC shall, under their own respective
charters and regulatory authority, issue their Guidelines and Circulars on anti-money laundering
to effectively implement the provisions of REPUBLIC ACT NO. 9160, AS AMENDED BY
REPUBLIC ACT NO. 9194.
Rule 17.2. Money Laundering Prevention Programs.
Rule 17.2.a. Covered institutions shall formulate their respective money laundering
prevention programs in accordance with Section 9 and other pertinent provisions of the AMLA
and these Rules, including, but not limited to, information dissemination on money laundering
activities and their prevention, detection and reporting, and the training of responsible officers
and personnel of covered institutions, subject to such guidelines as may be prescribed by their
respective supervising authority. Every covered institution shall submit its own money laundering
program to the supervising authority concerned within the non-extendible period that the
supervising authority has imposed in the exercise of its regulatory powers under its own charter.
Rule 17.2.b. Every money laundering program shall establish detailed procedures
implementing a comprehensive, institution-wide know-your-client policy, set-up an effective
dissemination of information on money laundering activities and their prevention, detection
and reporting, adopt internal policies, procedures and controls, designate compliance officers
at management level, institute adequate screening and recruitment procedures, and set-up an
audit function to test the system.
Appendix 52 - Page 29
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03.12.31
Rule 17.2.c. Covered institutions shall adopt, as part of their money laundering programs,
a system of flagging and monitoring transactions that qualify as suspicious transactions,
regardless of amount or covered transactions involving amounts below the threshold to facilitate
the process of aggregating them for purposes of future reporting of such transactions to the
AMLC when their aggregated amounts breach the threshold. All covered institutions, including
banks insofar as non-deposit and non-government bond investment transactions are concerned,
shall incorporate in their money laundering programs the provisions of these Rules and such
other guidelines for reporting to the AMLC of all transactions that engender the reasonable
belief that a money laundering offense is about to be, is being, or has been committed.
Rule 17.3. Training of Personnel. - Covered institutions shall provide all their responsible
officers and personnel with efficient and effective training and continuing education programs
to enable them to fully comply with all their obligations under the AMLA and these Rules.
Rule 17.4. Amendments. - These Rules or any portion thereof may be amended by unanimous
vote of the members of the AMLC and submitted to the Congressional Oversight Committee as
provided for under Section 19 of REPUBLIC ACT NO. 9160, as amended BY REPUBLIC ACT
NO. 9194.
RULE 18
Congressional Oversight Committee
Rule 18.1. Composition of Congressional Oversight Committee. - There is hereby created a
Congressional Oversight Committee composed of seven (7) members from the Senate and
seven (7) members from the House of Representatives. The members from the Senate shall be
appointed by the Senate President based on the proportional representation of the parties or
coalitions therein with at least two (2) Senators representing the minority. The members from
the House of Representatives shall be appointed by the Speaker also based on proportional
representation of the parties or coalitions therein with at least two (2) members representing
the minority.
Rule 18.2. Powers of the Congressional Oversight Committee. - The Oversight Committee
shall have the power to promulgate its own rules, to oversee the implementation of this Act,
and to review or revise the implementing rules issued by the Anti-Money Laundering Council
within thirty (30) days from the promulgation of the said rules.
RULE 19
Appropriations For and Budget of the AMLC
Rule 19.1. Budget. The budget of Php25,000,000.00 appropriated by Congress under the
AMLA shall be used to defray the initial operational expenses of the AMLC. Appropriations for
succeeding years shall be included in the General Appropriations Act. The BSP shall advance
the funds necessary to defray the capital outlay, maintenance and other operating expenses
and personnel services of the AMLC subject to reimbursement from the budget of the AMLC
as appropriated under the AMLA and subsequent appropriations.
Appendix 52 - Page 30
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03.12.31
Rule 19.2. Costs and Expenses. - The budget shall answer for indemnification for legal costs
and expenses reasonably incurred for the services of external counsel in connection with any
civil, criminal or administrative action, suit or proceedings to which members of the AMLC
and the Executive Director and other members of the Secretariat may be made a party by
reason of the performance of their functions or duties. The costs and expenses incurred in
defending the aforementioned action, suit or proceeding may be paid by the AMLC in advance
of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or
on behalf of the member to repay the amount advanced should it be ultimately determined
that said member is not entitled to such indemnification.
RULE 20
Separability Clause
Rule 20. Separability Clause. If any provision of these Rules or the application thereof to any
person or circumstance is held to be invalid, the other provisions of these Rules, and the
application of such provision or Rule to other persons or circumstances, shall not be affected
thereby.
RULE 21
Repealing Clause
Rule 21. Repealing Clause. All laws, decrees, executive orders, rules and regulations or parts
thereof, including the relevant provisions of Republic Act No. 1405, as amended; Republic
Act No. 6426, as amended; Republic Act No. 8791, as amended, and other similar laws, as
are inconsistent with the AMLA, are hereby repealed, amended or modified accordingly.
RULE 22
Effectivity of The Rules
Rule 23.1. Effectivity. These Rules shall take effect after its approval by the Congressional
Oversight Committee and fifteen (15) days after its complete publication in the Official Gazette
or in a newspaper of general circulation.
RULE 23
Transitory Provisions
Rule 23.1. - Transitory Provisions. - EXISTING FREEZE ORDERS ISSUED BY THE AMLC SHALL
REMAIN IN FORCE FOR A PERIOD OF THIRTY (30) DAYS AFTER EFFECTIVITY OF THIS
ACT, UNLESS EXTENDED BY THE COURT OF APPEALS.
Rule 23.2. - EFFECT OF REPUBLIC ACT NO. 9194 ON CASES FOR EXTENSION OF FREEZE
ORDERS RESOLVED BY THE COURT OF APPEALS. - ALL EXISTING FREEZE ORDERS WHICH
THE COURT OF APPEALS HAS EXTENDED SHALL REMAIN EFFECTIVE, UNLESS
OTHERWISE DISSOLVED BY THE SAME COURT.
Appendix 52 - Page 31
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APP. 52a
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Annex A
AMLC Resolution No. 292
APP. 52a
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Annex B
1.
Banks should develop clear customer acceptance policies and procedures, including a
description of the types of customer that are unacceptable to bank management. In preparing
such policies, factors such as customers background, country of origin, public or high profile
position, business activities or other risk indicators should be considered. Banks should develop
graduated customer acceptance policies and procedures that require more extensive due
diligence for high risk customers. For example, the policies may require the most basic accountopening requirements for a working individual with a small account balance, whereas quite
extensive due diligence may be deemed essential for an individual with a high net worth
whose source of funds is unclear. Decisions to enter into business relationships with high risk
customers, such as individuals holding important/prominent positions, public or private (see
below), should be taken exclusively at senior management level.
2.
Customer identification
APP. 52a
03.12.31
standards have been introduced only recently and do not as yet apply fully to existing customers,
a risk assessment exercise can be undertaken and priority given to obtaining necessary
information, where it is deficient, in respect of the higher risk cases. An appropriate time to
review the information available on existing customers is when a transaction of significance
takes place, or when there is a material change in the way that the account is operated.
However, if a bank is aware that it lacks sufficient information about an existing high-risk
customer, it should take steps to ensure that all relevant information is obtained as quickly as
possible. In addition, the supervisor needs to set an appropriate target date for completion of
a KYC review and regularization of all existing accounts. In any event, a bank should undertake
regular reviews of its customer base to establish that it has up-to-date information and a proper
understanding of its account holders identity and of their business.
Banks that offer private banking services are particularly exposed to reputational risk.
Private banking by nature involves a large measure of confidentiality. Private banking accounts
can be opened in the name of an individual, a commercial business, a trust, an intermediary
or a personalized investment company. In each case reputational risk may arise if the bank
does not diligently follow established KYC procedures. In no circumstances should private
banking operations function autonomously, or as a bank within a bank2 , and no part of the
bank should ever escape the required procedures. This means that all new clients and new
accounts should be approved by at least one person other than the private banking relationship
manager. If particular safeguards are put in place internally to protect confidentiality of private
banking customers and their business, banks must still ensure that at least equivalent scrutiny
and monitoring of these customers and their business can conducted, e.g. they must be open
to review by compliance officers and auditors.
2.1
Some banks insulate their private banking functions or create Chinese walls as a means of providing additional
protection for customer confidentiality.
APP. 52a
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In a numbered account, the name of the beneficial owner is known to the bank but is substituted by an account
number or code name in subsequent documentation.
APP. 52a
03.12.31
diligence on the intermediary and establish to its complete satisfaction that the
intermediary has a sound due diligence process for each of its clients.
Special care needs to be exercised in initiating business transactions with
companies that have nominee shareholders or shares in bearer form. Satisfactory
evidence of the identity of beneficial owners of all companies needs to be obtained.
The above procedures may prove difficult for banks in some countries to follow.
In the case of professional intermediaries such as lawyers, there might exist professional
codes of conduct preventing the dissemination of information concerning their clients.
The FATF is currently engaged in a review of KYC procedures governing accounts
opened by lawyers on behalf of clients. The Working Group has therefore not taken a
definitive position on this issue.
2.2.2
Introduced business
Reputational risk
APP. 52a
03.12.31
strong political reaction, even if the illegal origin of the assets is often difficult to prove.
In addition, the bank may be subject to costly information requests and seizure orders
from law enforcement or judicial authorities (including international mutual assistance
procedures in criminal matters) and could be liable to actions for damages by the state
concerned or the victims of a regime. Under certain circumstances, the bank and/or its
officers and employees themselves can be exposed to charges of money laundering, if
they know or should have known that the funds stemmed from corruption or other
serious crimes.
3.
APP. 52a
03.12.31
They may include transactions that do not make economic or commercial sense, or that involve
large amounts of cash deposits that are not consistent with the normal and expected transactions
of the customer. Very high account turnover, inconsistent with the size of the balance, may
indicate that funds are being washed through the account. A list of suspicious activities
drawn up by supervisors can be very helpful to banks.
Bank should develop a clear policy and internal guidelines, procedures and controls
and remain especially vigilant regarding business relationships with individuals holding
important/prominent positions, public or private, and high profile individuals or with persons
and companies that are clearly related to or associated with them.5
4.
Risk Management
Effective KYC procedures embrace routines for proper management oversight, systems
and controls, segregation of duties, training and other related policies. The board of directors
of the bank should be fully committed to an effective KYC programme by establishing
appropriate procedures and ensuring their effectiveness. Banks should appoint a senior officer
with explicit responsibility for ensuring that the banks policies and procedures are, at a
minimum, in accordance with local supervisory practice. Banks should have clear written
procedures, communicated to all personnel, for staff to report suspicious transactions to a
specified senior manager. That manager must then assess whether the banks statutory
obligations under recognized suspicious activity reporting regimes require the transaction to
be reported to the appropriate law enforcement and supervisory authorities.
All banks must have an ongoing employee-training programme so that bank staff is
adequately trained in KYC procedures. The timing and content of training for various sectors
of staff will need to be adapted by the bank for its own needs. Training requirements should
have a different focus for new staff, front-line staff, compliance staff or staff dealing with new
customers. New staff should be educated in the importance of KYC policies and the basic
requirements at the bank. Front-line staff members who deal directly with the public should
be trained to verify the customer identity for new customers, to exercise due diligence in
handling accounts of existing customers on an ongoing basis and to detect patterns of suspicious
activity. Regular refresher training should be provided to ensure that staff is reminded of their
responsibilities and is kept informed of new developments. It is crucial that all relevant staff
fully understand the need for and implement KYC policies consistently. A culture within
banks that promotes such understanding is the key to successful implementation.
Banks internal audit and compliance functions have important responsibilities in
evaluating and ensuring adherence to KYC policies and procedures. As a general rule, the
5
It is unrealistic to expect the bank to know or investigate every distant family, political or business connection of
a foreign customer. The need to pursue suspicions will depend on the size of the assets or turnover, pattern of
transactions, economic background, reputation of the country, plausibility of the customers explanations etc. It
should however be noted that individuals holding important/prominent positions, public or private (or rather their
family members and friends) would not necessarily present themselves in that capacity, but rather as ordinary
(albeit wealthy) business people, masking the fact they owe their high position in a legitimate business corporation
only to their privileged relation with the holder of the public office.
APP. 52a
03.12.31
compliance function provides an independent evaluation of the banks own policies and
procedures, including legal and regulatory requirements. Its responsibilities should include
ongoing monitoring of staff performance through sample testing of compliance and review of
exception reports to alert senior management or the Board of Directors if it believes
management is failing to address KYC procedures in a responsible manner.
Internal audit plays an important role in independently evaluating the risk management
and controls, discharging its responsibility to the Audit Committee of the Board of Directors
or a similar oversight body through periodic evaluations of the effectiveness of compliance
with KYC policies and procedures. Management should ensure that audit functions are staffed
adequately with individuals who are well-versed in such policies and procedures. In addition,
internal auditors should be proactive in following-up their findings and criticisms.
APP. 52a
03.12.31
Annex B-1
APP. 52a
03.12.31
Annex C
The Working Group on Cross-border Banking is a joint group consisting of members of the Basel Committee
and of the Offshore Group of Banking Supervisors.
APP. 52a
03.12.31
7. Customer identification documents should be retained for at least five years after an
account is closed. All financial transaction records should be retained for at least five years
after the transaction has taken place.
8. These guidelines are divided into two sections covering different aspects of customer
identification. Section A describes what types of information should be collected and verified
for natural persons seeking to open accounts or perform transactions. Section B describes
what types of information should be collected and verified for institutions and is in two parts,
the first relating to corporate vehicles and the second to other types of institutions.
9. All the terms used in these guidelines have the same meaning as in the Customer
due diligence for banks paper.
A.
Natural Persons
10. For natural persons the following information should be obtained, where applicable:
legal name and any other names used (such as maiden name);
correct permanent address (the full address should be obtained; a Post Office
box number is not sufficient);
nationality;
signature.
11. The bank should verify this information by at least one of the following methods:
confirming the date of birth from an official document (e.g. birth certificate,
passport, identity card, social security records);
confirming the permanent address (e.g. utility bill, tax assessment, bank
statement, a letter from a public authority);
APP. 52a
03.12.31
12. The examples quoted above are not the only possibilities. In particular jurisdictions
there may be other documents of an equivalent nature which may be produced as satisfactory
evidence of customers identity.
13. Financial institutions should apply equally effective customer identification procedures
for non-face-to-face customers as for those available for interview.
14. From the information provided in paragraph 10, financial institutions should be able
to make an initial assessment of a customers risk profile. Particular attention needs to be
focused on those customers identified thereby as having a higher risk profile and additional
inquiries made or information obtained in respect of those customers to include the following:
prior bank reference and contact with the bank regarding the customer;
source of wealth;
15. For one-off or occasional transactions where the amount of the transaction or series
of linked transactions does not exceed an established minimum monetary value, it might be
sufficient to require and record only name and address.
16. It is important that the customer acceptance policy is not so restrictive that it results
in a denial of access by the general public to banking services, especially for people who are
financially or socially disadvantaged.
B.
Institutions
17. The underlying principles of customer identification for natural persons have equal
application to customer identification for all institutions. Where in the following the
identification and verification of natural persons is involved, the foregoing guidance in respect
of such persons should have equal application.
APP. 52a
03.12.31
18. The term institution includes any entity that is not a natural person. In considering
the customer identification guidance for the different types of institutions, particular attention
should be given to the different levels of risk involved.
I.
Corporate Entities
19. For corporate entities (i.e. corporations and partnerships), the following information
should be obtained:
name of institution;
20. The bank should verify this information by at least one of the following methods:
for established corporate entities - reviewing a copy of the latest report and
accounts (audited if available);
APP. 52a
03.12.31
21. The bank should also take reasonable steps to verify the identity and reputation of
any agent that opens an account on behalf of a corporate customer, if that agent is not an
officer of the corporate customer.
Corporations/Partnerships
22. For corporations/partnerships, the principal guidance is to look behind the institution
to identify those who have control over the business and the companys/partnerships assets,
including those who have ultimate control. For corporations, particular attention should be
paid to shareholders, signatories, or others who inject a significant proportion of the capital or
financial support or otherwise exercise control. Where the owner is another corporate entity
or trust, the objective is to undertake reasonable measures to look behind that company or
entity and to verify the identity of the principals. What constitutes control for this purpose will
depend on the nature of a company, and may rest in those who are mandated to manage
funds, accounts or investments without requiring further authorisation, and who would be in a
position to override internal procedures and control mechanisms. For partnerships, each partner
should be identified and it is also important to identify immediate family members that have
ownership control.
23. Where a company is listed on a recognised stock exchange or is a subsidiary of such
a company then the company itself may be considered to be the principal to be identified.
However, consideration should be given to whether there is effective control of a listed company
by an individual, small group of individuals or another corporate entity or trust. If this is the
case then those controllers should also be considered to be principals and identified accordingly.
II.
24. For the account categories referred to paragraphs 26 to 34, the following information
should be obtained in addition to that required to verify the identity of the principals:
name of account;
mailing address;
APP. 52a
03.12.31
25. The bank should verify this information by at least one of the following:
APP. 52a
03.12.31
defined. In the case of a foundation, steps should be taken to verify the founder, the managers/
directors and the beneficiaries.
Professional Intermediaries
31. When a professional intermediary opens a client account on behalf of a single client
that client must be identified. Professional intermediaries will often open pooled accounts
on behalf of a number of entities. Where funds held by the intermediary are not co-mingled
but where there are sub-accounts which can be attributable to each beneficial owner, all
beneficial owners of the account held by the intermediary should be identified. Where the
funds are co-mingled, the bank should look through to the beneficial owners; however, there
may be circumstances which should be set out in supervisory guidance where the bank may
not need to look beyond the intermediary (e.g. when the intermediary is subject to the same
due diligence standards in respect of its client base as the bank).
32. Where such circumstances apply and an account is opened for an open or closed
ended investment company, unit trust or limited partnership which is also subject to the same
diligence standards in respect of its client base as the bank, the following should be considered
as principals and the bank should take steps to identify:
account signatories;
any other person who has control over the relationship e.g. fund administrator or
manager.
33. Where other investment vehicles are involved, the same steps should be taken as in
paragraph 32 where it is appropriate to do so. In addition all reasonable steps should be taken
to verify the identity of the beneficial owners of the funds and of those who have control of the
funds.
34. Intermediaries should be treated as individual customers of the bank and the standing
of the intermediary should be separately verified by obtaining the appropriate information
drawn from the itemised lists included in paragraphs 19-20 above.
APP. 52b
04.12.31
APP. 52b
04.12.31
APP. 52b
04.12.31
APP. 52c
04.12.31
3.
APP. 52c
04.12.31
APP. 52c
04.12.31
APP. 52c
04.12.31
with
anti-money
APP. 53
02.12.31
That we have monitored (Name of Bank)s compliance with R.A. No. 9160 (AntiMoney Laundering Act of 2001) as well as with BSP Circular Nos. 251, 253, 259 and
302;
2.
That the Bank is complying with the required customer identification, documentation
of all new clients, and continued monitoring of customers activities;
3.
That the Bank is also complying with the requirement to record all transactions and to
maintain such records including the record of customer identification for at least five
(5) years;
4.
That the Bank does not maintain anonymous or fictitious accounts; and
5.
That we conduct regular anti-money laundering training sessions for all bank officers
and selected staff members holding sensitive positions.
________________________
(Name of President or officer
of equivalent rank)
__________________
(Name of Compliance
Officer)
Community
Tax Cert. No
Date/Place
Issued
Notary Public
Appendix 53 - Page 1
APP. 54
03.12.31
Appendix 54 - Page 1
APP. 55
03.12.31
Documents to be submitted
Applicants records
Appendix 55 - Page 1
APP. 55
03.12.31
Export Financing
(Export Packing Credit)
Credit Line
(Temporary Working Capital)
Target Industries
Eligible
Enterprises
At least sixty percent (60%) Filipinoowned whose assets are not more than
P100 million, excluding the value of
the land
At least sixty percent (60%) Filipinoowned whose assets are not more than
P100 million, excluding the value of
the land
Maximum
Financing
Interest Rate**
Repayment Term
Collateral*
Evaluation and
Service Fees
Profitability
Other Ratios
* The Program will not decline a loan only on the basis of inadequate collateral. However, the borrower must be
willing to mortgage all available business and personal collateral, including assets to be acquired from the
loan to secure the borrowing.
** Applicable to all loan applications with complete requirements received up to June 30, 2003. A GFI committee
shall be set up to review the pricing thereafter on a quarterly basis.
Appendix 55 - Page 2
APP. 55
03.12.31
Loan Purpose
a) Purchase of equipment
b) Building construction
c) Purchase of lot
d) Purchase of inventories permanent
working capital
Target Industries
Eligible Enterprises
Maximum Financing
Interest Rate
Repayment Term
Collateral**
* Based on yield of bonds with three (3) or five (5) year remaining loan tenor as per MART 1 of Bloomberg. As of
January 22, 2003, MART 1-Bloomberg, 3-year term loan has a yield of 9.25% and 5 year term loan has a yield
of 10.75%. With a premium of 2%, the 3-year rate will be set at 11.25% and the 5-year rate at 12.75%.
** The Program will not decline a loan only on the basis of inadequate collateral. However, the borrower must be
willing to mortgage all available business and personal collateral, including assets to be acquired from the loan
to secure the borrowing.
Appendix 55 - Page 3
APP. 55
03.12.31
Profitability
Other Ratios
Appendix 55 - Page 4
APP. 56
03.12.31
Appendix 56 - Page 1
APP. 56
03.12.31
Appendix 56 - Page 2
APP. 56a
04.12.31
General Principles
These guidelines set out alternative
regulatory accounting treatment of the sale
of non-performing assets (NPAs) by banks
and other financial institutions (FIs) under BSP
supervision to Special Purpose Vehicles
(SPVs) and to qualified individuals for
housing under Republic Act No. 9182,
otherwise known as The Special Purpose
Vehicle (SPV) Act of 2002.
The guidelines recognize that banks/FIs
may need temporary regulatory relief, in
addition to tax relief under the SPV Law,
particularly in the timing of recognition of
losses, so that they may be encouraged to
maximize the sale of their NPAs even at
substantial discounts: Provided, however,
That in the interest of upholding full
transparency and sustaining market
discipline, banks/FIs that avail of such
regulatory relief shall fully disclose its impact
in all relevant financial reports.
The guidelines cover the following areas:
(1) Derecognition of NPAs sold/
transferred to an SPV and initial recognition
of financial instruments issued by the SPV to
the selling bank/FI as partial or full settlement
of the NPAs sold/transferred to the SPV;
(2) Subsequent measurement of the
carrying amount of financial instruments
issued by the SPV to the selling bank/FI;
(3) Capital adequacy ratio (CAR)
calculation; and
(4) Disclosure requirement on the selling
bank/FI.
APP. 56a
04.12.31
Cumulative Write-down
of Deferred Charges
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
5%
10%
15%
25%
35%
45%
55%
70%
85%
100%
APP. 56a
04.12.31
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Cumulative Booking of
Allowance for
Probable Losses
5%
10%
15%
25%
35%
45%
55%
70%
Year 9
Year 10
85%
100%
APP. 56a
04 .12.31
Cumulative Recognition
of Losses/Impairment
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
5%
10%
15%
25%
35%
45%
55%
70%
85%
100%
120
20
100
0
120
15
120
20
100
30
0
15
Financial
Instruments
Only
(0, 120)
120
20
100
30
90
15
100
30
100
15
120
20
15
100
30
70
120
20
Face amounts of financial instruments exceed the excess of the gross amount of the NPAs over the cash proceeds.
Face amounts of financial instruments do not exceed the excess of the gross amount of the NPAs over the cash proceeds.
Loans/ROPOAs, gross
Allowance for probable
losses
Loans/ROPOAs, net
Cash payment received
Financial instruments
received
Unbooked valuation
reserves on remaining assets
Assumptions:
(30, 0)
Cash Only
Mode of Payment
(Cash, Financial Instruments)
ILLUSTRATIVE ACCOUNTING ENTRIES TO RECORD SALE OF NPAs TO SPV UNDER THE SPV LAW OF 2002
UNDER DEFERRED RECOGNITION OF LOSS/IMPAIRMENT OF FINANCIAL INSTRUMENTS
APP. 56a
04.12.31
Annex A
APP. 56a
04.12.31
Accounting Entries
1 Allowance for Probable Losses
NPAs sold Allowance For
Probable Losses- Remaining
Assets
(For unbooked provisions)
(As additional provisions)
Part Cash,
Part Cash,
Part Cash,
Part
Part
Part
Cash Only
Financial
Financial
Financial
Instruments 1 Instruments 2 Instruments
(30, 0)
(30, 100)
(30, 70)
(30, 90)
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Financial
Instruments
Only
(0, 120)
20
20
20
15
5
20
15
5
15
5
20
15
5
15
5
30
0
90
0
120
0
30
100
0
30
90
0
30
70
20
120
120
120
120
120
10
xxx
0
xxx
0
0
0
0
xxx
0
xxx
1
2
Face amounts of financial instruments exceed the excess of the gross amount of the NPAs over the cash proceeds.
Face amounts of financial instruments do not exceed the excess of the gross amount of the NPAs over the cash proceeds.
APP. 56a
04.12.31
Accounting Entries
Part Cash,
Part Cash,
Part Cash,
Part
Part
Part
Cash Only
Financial
Financial
Financial
Instruments 1 Instruments 2 Instruments
(30, 0)
(30, 100)
(30, 70)
(30, 90)
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
1
2
Financial
Instruments
Only
(0, 120)
xxx
xxx
xxx
xxx
0
xxx
xxx
xxx
xxx
Face amounts of financial instruments exceed the excess of the gross amount of the NPAs over the cash proceeds.
Face amounts of financial instruments do not exceed the excess of the gross amount of the NPAs over the cash proceeds.
APP. 56a
04.12.31
Annex B
A. Statement of Condition
Amount
Particulars
Additional Information:
xxx
xxx
xxx
xxx
xxx
xxx
Cash received
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
APP. 56a
04.12.31
Amount
Additional Information:
Net income after income tax (with regulatory relief)
xxx
xxx
xxx
xxx
xxx
xxx
xxx
APP. 57
03.12.31
Appendix 57 - Page 1
APP. 57
03.12.31
advised to observe the existing rules and regulations of other government agencies (Department
of Finance, Securities and Exchange Commission) relating to LGU bond flotation.
III. Procedures and Documentary Requirements
A. Manner of Request
An LGU proposal to issue bonds shall be submitted to the Bangko Sentral ng Pilipinas
(BSP), through the Secretary of Finance with a formal request for the Monetary Boards opinion
on the probable effects of the proposed operation on monetary aggregates, the price level,
and the balance of payments.
B.
Documentary Requirements
The proposal shall be accompanied by the following documents:
1. An original copy (or a certified true copy) of the ordinance duly signed by the
appropriate officers pursuant to the Local Government Code. In accordance
with the Local Government Code, the ordinance authorizing the bond flotation
should:
a) state the specific purpose/project(s) for which the proposed indebtedness is
to be incurred;
b) certify that the project(s) to be financed by the bond flotation is/are a self
liquidating, income-producing development or livelihood project/s pursuant
to the priorities established in the approved local development program or
the public investment program; and
c) state the terms and conditions of the bond flotation, including sinking fund
or other funding arrangements.
2. A copy of the resolution designating the LGU representative, including the
specific acts/services that the representative has been authorized to perform.
3. A waiver letter on the confidentiality of information (Annex 1) under Sections
2 and 3 of R.A. No. 1405, as amended, authorizing all banks and financial
institutions under the supervision of the BSP and which have transactions with
the concerned LGU to disclose to the BSP all information pertaining to the
deposits, investments, loans and other transactions of the concerned LGU
(including the history or status of the LGUs dealings with said banks and
financial institutions); the waiver letter should be duly executed by the mayor
or governor as the case may be.
4. A Department of Finance (DOF) certification that the debt service and borrowing
capacity of the proponent LGU satisfies the legal requirements for a bond
issue.
Appendix 57 - Page 2
APP. 57
03.12.31
Appendix 57 - Page 3
APP. 57
03.12.31
Annex 1
(Name of Local Government Unit)
(Address)
Appendix 57 - Page 4
APP. 57
03.12.31
Annex 2
Appendix 57 - Page 5
APP. 58
03.12.31
Appendix 58 - Page 1
APP. 58
04.12.31
2. NON-TRADE TRANSACTIONS
Only non-trade transactions with specific due dates shall be eligible for forward contracts,
subject to the same documentation requirements under Circular No. 388 dated May 26, 2003
on the sale of FX for non-trade purposes.
2.1 Foreign Currency Loans owed to non-residents or AABs
2.1.1 Deliverable Forwards
The maturing portion of the outstanding eligible obligation, i.e., those that are
registered by the BSP, including interest and fees thereon as indicated in the BSP
registration letter, may be covered by a deliverable forward subject to the
documentary requirements under Circular No. 388 dated May 26, 2003, except
that the creditors billing statement shall be submitted only on or before the maturity
date of the contract.
2.1.2 NDFs
The outstanding eligible obligation, i.e., those that are registered by the BSP,
including interests and fees thereon as indicated in the BSP registration letter may
be covered by a non-deliverable forward subject to the documentary requirements
under Circular No. 388 dated May 26, 2003 except the creditors billing statement
which need not be submitted.
The amount of the forward contract shall not exceed the outstanding amount of
the underlying obligation during the term of the contract.
2.2 Inward Foreign Investments
The outstanding amount of sales/maturity proceeds due for repatriation to non-resident
investors pertaining to BSP - registered investments in:
a. PSE-listed shares of stock;
b. Government securities;
c. Money market instruments; and
d. Peso time deposits with a minimum tenor of 90 days may be covered by forward FX
contracts subject to the presentation of the original BSRD on or before deal date,
except that for Item 2.2.a above, the original BSRD or BSRD Letter-Advice together
with the local brokers sales invoice shall be presented on or before maturity date of
the FX forward contract which coincides with the settlement date of the PSE sale
transaction.
Appendix 58 - Page 2
APP. 58
04.12.31
Sales proceeds of BSP-registered investments in shares of stock that are not listed
in the PSE may be covered by a deliverable forward contract only if determined to be
outstanding and payable on a specific future date as indicated in the Contract To Sell/
Deed of Absolute Sale and subject to the same documentary requirements under Circular
No. 388 dated May 26, 2003.
B. FORWARD SALE OF FX TO COVER EXPOSURES DELIVERABLE AND NONDELIVERABLE
1. TRADE (includes trades with banks other than the issuing/booking bank)
1.1 Under LC
a. Copy of LC opened; and
b. Proforma Invoice, or
Sales Contract / Purchase Order
1.2 Under DA/OA, Documents Against Payment (DP) or Direct Remittance (DR)
Any of the following where delivery or shipment shall be made not later than one (1)
year from deal date:
a. Sales Contract
b. Confirmed Purchase Order
c. Accepted Proforma Invoice
d. Shipment/Import Advice of the Supplier
In addition to the above requirements, the bank/quasi-bank and their subsidiaries/
affiliates shall require the purchaser to submit a notarized Letter of Undertaking that:
i. At maturity of the forward contract, it shall comply with the documentation
requirements on the sale of FX for trade transactions under Circular-Letter dated
January 24, 2002, as amended; and
ii. No double hedging has been obtained by the client for the covered transactions.
2. NON-TRADE (NON-DELIVERABLE)
BSP-registered foreign investments without specific due dates are considered FX exposures.
As such, the outstanding balance of this investment, appearing in the covering BSRD may
only be covered by an NDF contract, based on its market/book value on deal date, subject
to prior BSP approval under Circular No. 135 dated July 22, 1997 and presentation of the
covering BSRD and the proof that the investment still exists (e.g. stock certificate, or brokers
buy invoice, or confirmation of sale, or certificate of investment in money market instruments,
Appendix 58 - Page 3
APP. 58
04.12.31
or certificate of peso time deposits). Hedging for permanently assigned capital required for
Philippine branches of foreign banks/firms is not allowed.
C. FORWARD PURCHASE OF FX
FX forward contracts shall be subject to the institutions Know Your Customer policy of
the institution and the AMLA guidelines of the BSP. In addition, counterparties must be
limited to those which are manifestly eligible to engage in FX forwards as part of the normal
course of their operations and which satisfy the institutions suitability and eligibility rules
for such transactions.
D. FX SWAP TRANSACTIONS
1. FX SALE (first leg)/FORWARD FX PURCHASE (second leg) (with nonblank counterparties)
The same minimum documentary requirements for sale of FX under BSP Circular No. 388
dated May 26, 2003 for non-trade transactions, and Circular-Letter dated January 24, 2002 for
trade transactions, as amended, shall be presented on or before deal date.
2. FX PURCHASE (first leg)/FORWARD FX SALE (second leg) (with nonblank counterparties) The first leg of the swap will be subject to the institutions Know Your Customer policy
and the AMLA guidelines of the BSP and will require the conversion of foreign currency to
pesos. The second leg of the swap transaction will be subject to the swap contract between the
counterparties.
Banks/quasi-banks and their subsidiaries/affiliates shall: (a) retain copies of supporting
documents pertaining to the underlying transaction (e.g., BSP approval or registration [for BSPapproved/registered foreign currency loans and investments], promissory note, loan agreement,
stock certificate, certificate of time deposit, proof of FCDU deposit, shipping documents) which
shall be made available to the BSP for verification; and (b) submit copies of the covering swap
contracts to the BSP-Treasury Department within three (3) days from the execution of the swap
contract.
Swap contracts of this type with non-residents shall, however, require prior BSP approval.
Appendix 58 - Page 4
US $ 1 MM
US $ 1: PhP 53.00
FCDU Books
US $
Dr
Cr
RBU Books
PhP
Dr
US$
Cr
Dr
Cr
1,013,333.33
1,000,000.00
13,333.33
53,000,000.00
706,666.50
Peso Loan
Accrued Interest Receivable
Due to FCDU
1,013,333.33
Settlement:
Due from Foreign Banks
Due from RBU
Due to FCDU
Due from Foreign Banks
1,013,333.33
1,013,333.33
1,013,333.33
1,013,333.33
APP. 59
04.12.31
Appendix 59 - Page 1
1,013,333.33
RBU Books
PhP
Dr
US$
Cr
Dr
Cr
763,333.33
250,000.00
1,000,000.00
13,333.33
Peso Loan
Accrued Interest Receivable
Due to FCDU
Allowance for Probable Loss
53,000,000.00
706,666.50
763,333.33
13,250,000.00
763,333.33
40,456,666.50
Settlement:
Due from Foreign Banks
Cash (or any mode of payment)
763,333.33
763,333.33
Due to FCDU
Due from Foreign Banks
763,333.33
763,333.33
Transfer of ROPOA:
Due from RBU
Allowance for Probable Loss
ROPOA
750,000.00
250,000.00
1,000,000.00
APP. 59
04.12.31
Appendix 59 - Page 2
FCDU Books
US $
Dr
Cr
FCDU Books
US $
Dr
Cr
RBU Books
PhP
Dr
US$
Cr
Dr
Cr
53,000,000.00
ROPOA
Due to FCDU
Allowance for Probable Loss
750,000.00
13,250,000.00
750,000.00
39,750,000.00
Settlement:
Due from Foreign Banks
Due from RBU
Due to FCDU
Due from Foreign Banks
750,000.00
750,000.00
750,000.00
750,000.00
APP. 59
04.12.31
Appendix 59 - Page 3
APP. 60
04.12.31
The rules and regulations on common trust funds (CTFs) were previously under Sec. X410 and the Subsections enclosed in
parentheses. The UIT Funds regulations which are now in said section/subsections took effect on 01 October 2004 (effectivity of Circular 447 dated 03 September 2004).
1
Appendix 60 - Page 1
APP. 60
04.12.31
Appendix 60 - Page 2
APP. 60
04.12.31
Rate
of Tax
Appendix 60 - Page 3
APP. 61
04.12.31
Appendix 61 - Page 1
APP. 61
04.12.31
Information/Data Required
2. Reconciliation for the differences in
amounts between the audited financial
statements and the submitted
Consolidated Statement of Condition
(CSOC) and Consolidated Statement of
Income and Expenses (CSIE) for bank
proper (regular and FCDU) and trust
department, including copies of adjusting
entries effected by the external auditor.
Appendix 61 - Page 2
APP. 61
04.12.31
Information/Data Required
i.
Appendix 61 - Page 3
APP. 61
04.12.31
Information/Data Required
1. Termination or resignation as
external auditor and starting
the reason therefore;
2. Discovery of a material
breach of laws or BSP rules
and regulations such as, but
not limited to:
a. Capital adequacy ratio;
and
b. Loans and other risk
assets review and
classification.
3. Findings on matters of
corporate governance that
may require urgent action by
the BSP.
Note: In case there are no matters to
report (e.g. fraud, dishonesty, breach
of laws, etc.), the external auditor
shall submit a notarized certification
that there is none to report with
regard to the items enumerated
under Item C of Appendix 43.
Appendix 61 - Page 4
APP. 61
04.12.31
Annex 1
Name of Bank
Comparison of Audited Financial Statements and
Submitted Consolidated Statement of Condition and Income and Expenses
As of (end of calendar or fiscal year)
(In Thousand Pesos)
Audited
FS
Submitted
Report
Discrepancy
Reasons for
Discrepancy
Appendix 61 - Page 5
APP. 62
04.12.31
Appendix 62 - Page 1
APP. 63
04.12.31
A. General approach
UBs/KBs are expected to comply with
the standardized approach for credit risk, and
the basic indicator or standardized
approaches for operational risk by 2007. By
2010, these banks may move to the
foundation internal ratings based (IRB) or
advanced IRB approaches for credit risk, and
advanced measurement approaches for
operational risk.
TBs, on the other hand, are classified into
two (2). TBs are generally expected to be
subject to an enhanced Basel 1-type
approach by 2007. However, TBs affiliated
with UBs/KBs should use the same approach
used by the UBs/KBs.
RBs/Coop Banks, meanwhile, are
expected to be subject to an enhanced Basel
1-type approach also by 2007.
An enhanced Basel 1-type approach is
basically the same as the current framework
(Sec. X116) but with certain elements of Basel
2 already incorporated such as higher risk
weight for past due accounts, and expanded
disclosures.
B. Timetable
Between 2004 and 2007, certain
provisions of Basel 2 will be gradually
incorporated into the current risk-based
capital adequacy framework. These would
include:
(1) Giving lower risk weights for highlyrated corporate exposures;
(2) Giving higher risk weights for past
due claims (net of specific provisions);
(3) Adopting the standardized approach
for investments in securitization structures
(i.e., risk weights would depend on external
ratings);
(4) Implementing a standard computation of liquidity risk and interest rate risk in
the banking book; and
(5) Issuing broad guidelines on
operational risk management.
The rest of the provisions of Basel 2
standardized approach for credit risk, and
basic indicator and standardized approaches
for operational risk will be implemented by
2007. Under the standardized approach for
credit risk, risk weights would mainly depend
on the external rating of the counterparty.
Under the basic indicator approach for
operational risk, capital charge is fifteen
percent (15%) of the 3-year average of a
banks gross income. Under the standardized
approach for operational risk, on the other
hand, banks will compute capital charge
separately for each business line. Business
line operational risk charge is a fraction
(between 12%-18%) of the 3-year average
of a business lines gross income. Total
operational risk charge is the sum of the
operational risk charges for all business lines.
The expanded disclosure requirements
prescribed under Basel 2, as may be
appropriate, will also be implemented by
2007.
The draft implementation guidelines
containing all these provisions will be
exposed for comment by the BSP in the first
quarter of 2005. The final implementation
guidelines are expected to be issued by endDecember 2005.
By 2010, banks may already be allowed
to use the advanced approaches prescribed
under Basel 2. For credit risk, banks may
use the internal ratings based approach,
where the credit risk capital charge would
Appendix 63 - Page 1
APP. 63
04.12.31
Appendix 63 - Page 2
INDEX
04.12.31
A
Agrarian reform and agricultural credit III - 26b
allowable alternative compliance III - 27
computation of loanable funds III - 26d
consolidated compliance III - 30a
definition of terms III - 26b
agrarian reform beneficiaries III - 26b
agrarian reform credit III - 26b
agricultural credit III - 26b
loanable funds III - 26b
interest and other charges III - 30
required allocation III - 26c
sanctions III - 31
submission of reports III - 30 see also App. 6
syndicated type of agrarian reform credit/
agricultural credit III - 30
unused agri-agra funds to be utilized for
socialized and low-cost housing III - 30
who may borrow; purposes III - 26c
Agriculture and Fisheries Projects with Long
Gestation Periods III - 37
definition of terms III - 38
gestation period III - 38
grace period III - 38
grace period III - 38 see also App. 36
non-performing loans III - 38
responsibility of lending banks III - 38
past due loans III - 38
Allowance for probable losses III - 1
booking III - 1
sanctions III - 1
Allowance for uncollected interest on loans
III - 7
Amortization on loans and other credit
accommodations III - 11
Amount due from the Bangko Sentral I - 10g
Annual Report of banks I - 56
disclosure requirements in the annual report
I - 56
posting and submission I - 56
Index - Page 1
INDEX
04.12.31
management oversight VI - 15
minimum documents required VI - 15
prospectus VI - 15
specimen of application to purchase ABS
VI - 16
specimen of certificate VI - 16
trust indenture VI - 15
minimum features of ABS VI - 16
miscellaneous provision VI - 19
originator and seller VI - 17
prohibited activities VI - 19
report to BSP VI - 20
representations and warranties VI - 17
servicer VI - 17
third party review VI - 17
trustee and issuer VI - 17
underwriter VI - 18
Assets acquired in settlement of loans III - 50
accounting guielines on the sale of nonperformong assets to special purpose
vehicles and to qualified individuals for
housing under "the Special Purpose Vehicle
(SPV) Act of 2002" App. 56a
booking III - 50
posting III - 50
sales contact receivables III - 51
transfer/sale of non-performing assets to a
special purpose vehicle or to an individual
III - 51 see also App. 56
Audited financial statements of banks I - 53
checklist of BSP requirements in the
submission of audited financial statements
and annual report App. 61
disclosure of external auditor's adverse findings
to the BSP I - 54
disclosure requirement in the notes to the
audited financial statements I - 55
financial audit I - 53
posting of audited financial statements I - 54
sanctions I - 54
Automated teller machines II - 28
mobile ATMs II - 28
offsite ATMs II - 28
Index - Page 2
B
Bad debts I - 24
Banks I - 6
basic guidelines in establishing banks I - 6 see
also App. 37, 38
classifications of banks I - 1
Universal banks (UBs) I - 1
Commercial banks (KBs) I - 1
Thrift banks (TBs) I - 1
Rural banks (RBs) I - 1
Cooperative banks (Coop Banks) I - 1
Islamic banks (IBs) I - 1
partial lifting of general moratorium on the
licensing of new TBs and RBs I - 6a
powers and scope of authorities I - 1
suspension of the grant of new banking
licenses on the establishment of new banks
I-6
Bank advertisements VI - 8a
Bank premises and other fixed assets VI - 7
appreciation or increase in book value VI - 7
batas pambansa bldg. 344 - VI - 8a
ceiling on total investments VI - 7
lease of bank premises VI - 8
reclassification of real and other properties
owned or acquired as bank premises VI - 8
Bank protection I - 56
Bangko Sentral inspection I - 57
designation of security officer I - 56
format certification on compliance App. 10
objectives I - 56
reports I - 57
security devices I - 56
security program I - 56
Banking days and hours I - 39
banking hours beyond the minimum I - 40
posting of schedule I - 40
report of, and changes in, banking days and
hours I - 40
INDEX
04.12.31
Banking offices I - 35
application for authority to establish branches
I - 35
branch location I - 36a
date of opening I - 36a
establishment of branches/loan collection and
disbursement points of microfinanceoriented banks I - 36c
establishment of additional branches of foreign
banks I - 36f
application for authority to establish
additional branch I - 36f
choice of locations for establishment of
branches I - 38
date of opening I - 37
requirements for establishment of additional
branch I - 37
requirements for opening a branch I - 37
sanctions I - 38
establishment of microfinance-oriented
branches/loan collection and disbursement
points of banks that are not microfinanceoriented I - 36c
establishment of offices abroad I - 38
application for authority to establish an
office abroad I - 38
conditions attached to the approved
application I - 38
date of opening I - 38a
establishment of a foreign subsidiary by a
bank subsidiary I - 39
requirements for establishing an office
abroad I - 38
requirements for opening an office abroad
I - 38a
sanctions I - 39
establishment/relocation/voluntary closure/sale
of branch I - 35
moratorium on the establishment of new
branches I - 35
prerequisites for the grant of authority to
establish a branch/banking office I - 36
prior Monetary Board approval I - 35
relocation/transfer of branches I - 36b
relocation/transfer of branch licenses of closed
banks I - 36f
relocation/transfer of head offices I - 36f
sanctions I - 36f
reports I - 41
requirements for opening a branch I - 36a
sanctions I - 36c
voluntary closure/sale of banking offices I - 36b
Bill of exchange drawn in good faith against
actually existing values III - 3
Bio-data of directors and officers I - 30i
Board of directors I - 27
place of meeting I - 57
powers, responsibilities and duties I - 30
sanctions I - 30d
Bonds II - 14b
compliance with SEC rules on registration of
bond issues II - 14b
new rules on the registration of long-term
commercial papers App. 13
definition of terms II - 14b
current market value II - 14
government securities II - 14b
net book value II - 14b
minimum features II - 14b
bond registry II - 14a
form; issue price; denomination II - 14b
interest; manner; form of payment II - 14c
term II - 14c
trust indenture; collaterals; sinking fund
II - 14c
notice to BSP II - 14b
Bonding/training of directors, officers and
employees I - 33
Borrowings from the Bangko Sentral II - 28 see
also rediscounting
constitutional prohibition II - 29
eligibile papers and collaterals II - 29
eligibility requirements for applicant banks
II - 28
eligibility requirements for availment of the
BSP rediscounting facility by banks II - 28
recording and reporting of borrowings
II - 34
Borrowings of RBs/Coop Banks II - 35
Index - Page 3
INDEX
04.12.31
BSP liquidity window II - 30d
limit II - 30d
nature II - 30d
terms of credit II - 30d
interest rate II - 30d
loan values II - 30d
repayment period II - 30d
security II - 30d
Business name I - 57
C
Capitalization I - 6b
bank capital I - 6b
definition of capital I - 6b
capital build-up program I - 7
memorandum of understanding I - 8
minimum capitalization I - 6b
prompt corrective action program I - 8
sanctions I - 8
Check and other clearing item (COCI) II - 3
Check clearing rules for Thrift Banks authorized
to accept demand deposits II - 4
Check clearing rules for Rural Banks who are
members of the PCHC II - 4a
Classifications, powers and scope of authorities
of Banks I - 1
certificate of authority to register I - 6b
classifications of banks I - 1
commercial banks I - 1
cooperative banks I - 1
islamic banks I - 1
rural banks I - 1
thrift banks I -1
universal banks I - 1
conditions for the grant of authority to convert
into a lower category I - 5
expansion of banking authorities I - 4
guidelines for the issuance of a universal
banking authority App. 1
implementing rules and regulations of R.A. No.
6848 (the Islamic Bank charter)
App. 44
Index - Page 4
Clearing operations VI - 4f
between regional clearing center and the
Manila clearing center App. 28a
clearing procedures App. 28
Collection agents of PhilHealth VI - 7
Collection and paying agents of the Social
Security System VI - 6
Collection of customs duties/taxes/levies and
other revenues VI - 4f
collection and reporting of customs duties and
import processing fees VI - 4f
collection and reporting of export/premium
duties VI - 4g
collection and reporting of internal revenue
taxes VI - 4f
collection of import duties at the time of
opening of letters of credit VI - 6
coverage VI - 4f
fines for delayed reports/remittances of
collections VI - 5
liquidity floor requirement on revenue
collections VI - 6
penalty for willful delay on the reporting of
collections/remittances VI - 5
reconciliation of revenue collections VI - 5
remittances thru debit/credit advices VI - 5
Collection of fines and other charges from banks
VI - 10
check/demand draft payments to the BSP of
thrift, cooperative and rural banks VI - 10
pro-forma payment form App. 35
cost of checks and documentary stamps VI - 10
payment of fines by banks VI - 10
procedures on collection of fines App. 29
INDEX
04.12.31
Commercial banks as depository of rediscounting
proceeds VI - 7 see also rediscounting
Commercial or business paper III - 3
Registration of long-term/short term
commercial paper App. 13 and 14
Committed credit line for commercial paper
issues III - 36
ceilings III - 36
facility to committed credit line issuers II - 33
ceiling II - 33
conditions to access II - 33
nature of special credit accommodations
II - 33
terms of credit II - 33
loan limit III - 37
reports to the BSP III - 37
terms; conditions; restrictions III - 37
who may grant line facility III - 36
Common trust funds IV - 14
establishment of common trust funds IV - 14
exposure limit of CTF to a single person
or entity IV - 16
management of CTFs IV - 15
minimum documentary requirements for CTFs
IV - 14
operating and accounting methodology
IV - 16
rules and regulations on CTFs App. 60
tax-exempt CTFs IV - 16
trustee as participant in CTFs IV - 15
Compliance officer I - 63
Compliance system I - 62
compliance risk I - 63
cross-border issues I - 64
independence I - 64
outsourcing I - 64
responsibilities of the board of directors and
senior management on compliance I - 63
role and responsibilities of the compliance
function I - 64
status I - 64
Index - Page 5
INDEX
04.12.31
Credit-linked notes (CLNs) and similar credit
derivative products VI - 14f
capital treatment of investments in CLNs
VI - 14g
definition VI - 14f
qualified banks VI - 14g
risk management VI - 14i
risk weight I - 10h
Credit policies of government-owned
corporations III - 51
credit priority classification App. 23
Credit rating agencies VI - 20 see also
recognition and derecognition of domestic
credit rating agencies for bank supervisory
purposes
Crimes/losses; reports I - 44
Currency Notes and Coins VI - 10a see also
Philippine and Foreign Currency Notes and
Coins
Current accounts of bank officers and
employees II - 4
D
Debt service limit on local government
borrowings III - 52
Demand deposits II - 1
authority to accept or create demand deposits
II - 1
check clearing rules for RBs II - 4a see also
App. 31
check clearing rules for TBs II - 4 see also
App. 31
checks without sufficient funds II - 2
current accounts of bank officers and
employees II - 4
drawings against uncollected deposits II - 2
prerequisites to accept or create demand
deposits II - 1
requirements for accepting demand deposits
II - 1
sanctions II - 1
temporary overdrawings II - 2
Index - Page 6
INDEX
04.12.31
risk disclosure statements VI - 4b
see also App. 26
risk management guidelines VI - 4b
see also App. 25
Tenor/maturity of FX forward or swap VI - 4c
see also App. 58
sanctions VI - 4b
scope and pre-qualification requirements VI - 2
Development loans III - 28
Directors I - 27
bio-data of directors I - 30k
compensation and other benefits I - 32a
confirmation of the election/appoinments of
directors I - 30e
definition/limits I - 28
definition of directors I -28
independent director I -28
limits on the number of the members of the
board of directors I - 28
terms and phrases I - 28
affiliate I - 28
control I - 28
majority stockholder or majority
shareholder I - 29
parent I - 28
related company I - 29
related interest I - 28
subsidiary I - 28
substantial or major shareholder I - 29
disqualification of directors I - 30f
disqualification procedures I - 30i
effect of non-possession of qualification or
possession of disqualifications I - 30h
place of meeting I - 57
persons disqualified I - 30g
powers/responsibilities and duties I - 30
qualifications I - 29
reports required I - 30e
sanctions I - 30e
watchlisting I - 30j
confidentiality I - 30j
delisting I - 30j
inclusion of directors/officers/employees in
the watchlist I - 30j
watchlist categories I - 30j
Dividends I - 24
definition of terms I - 24
bad debts I - 24
in process of collection I - 24
well secured I - 24
dividends on government shares I - 27
issuance of fractional shares I - 26
limitations/amount available on dividends
declared by RBs/Coop Banks I - 26
net amount available for dividends I - 25
recording of dividends I - 26
reporting and verification I - 25
requirements on the declaration of dividends
I - 25
DOSRI loans III - 18
Doubtful loans App. 18 - 3
basic characteristics App. 18 - 3
E
Electronic banking services VI - 14
application VI - 14
authentication VI - 14
authorization VI - 14
confidentiality VI - 14
integrity VI - 14
non-repudiation VI - 14
approval in principle VI - 14a
conditions for Monetary Board approval
VI - 14b
documentary requirements VI - 14a
exemption VI - 14c
pre-screening of applicants VI - 14a
pending applications VI - 14b
sanctions VI - 14c
transitory provision VI - 14c
Emergency loans or advances to banking
institutions II - 30e
allowable amount II - 31
general terms and conditions II - 32
interest rate II - 32
manner and conditions of release II - 32
nature II - 30e
other documentary requirements II - 32
Index - Page 7
INDEX
04.12.31
procedures II - 31
term II - 32
types of acceptable collaterals II - 32
when an emergency loan or advance may be
availed of II - 31
Equity investments III - 40a
conditions for investment in equities III - 40a
guidelines for major investments III - 40b
other limitations and restrictions III - 47
sanctions III - 47
scope of authority III - 40a
Examination by the BSP VI - 23
External Auditor I - 54
disclosure of external auditor's adverse findings
to the Bangko Sentral I - 54
disclosure requirement in the notes to the
audited financial statements I - 55
findings to be disclosed I - 54
sanction I - 54
selection, appointment and reporting require
ments for external auditors; sanction;
effectivity I - 63 see also App. 43
F
Facility to committed credit line issuers II - 33
ceiling II - 33
conditions to access II - 33
nature of special credit accommodations II - 33
terms of credit II - 33
interest rate II - 33
loan values II - 33
repayment period II - 33
security II - 33
Financial allied undertakings III - 41
limits on investment in the equities of financial
allied undertakings III - 41
Financial assistance to officers and employees
III - 25
funding by foreign banks III - 26
mechanics III - 25
other conditions/limitations III - 26a
Index - Page 8
INDEX
04.12.31
local bank V - 1
local branch of a foreign bank V - 1
long-term loans and securities V - 1
medium-term loans and securities V - 1
short-term loans and securities V - 1
eligibility as collateral V - 6
exemption from court order or process V - 6
foreign currency cover requirements V - 4
foreign currency deposit with the BSP V - 5
format certification on FCDU lending to RBU
App. 51
general provision on sanctions V - 12
inapplicability of the Usury Law V - 6
insurance coverage V - 6
mobile foreign exchange booths V - 7
numbered accounts V - 5
off-site automatic multi-currency money
changers V - 7
other transactions in foreign currency V - 7
prerequisites for the grant of authority to
operate FCDU App. 5a
qualification requirements V - 1
rates of interest V - 6
recognition of positions arising from banks'
foreign currency options in the computation
of net open FX position V - 7
repurchase agreements involving foreign
currency-denominated government securities
V-9
sample computation on FCDU lending to RBU
App. 51a
sanctions V - 6
secrecy of deposits V - 5
securities lending V - 8
supervision V - 6
taxes V - 6
withdrawability and transferability of deposits
V-6
Foreign equity investment in domestic
banks I - 19
Forward contracts with non-residents VI - 4e
G
Government deposits II - 14c
acceptance by banks with internet banking
facility of payment of fees for account of
government entities II - 19
H
High value crops project loans III - 29
Home-building III - 15
increased loan values and terms of loans for
home-building III - 15
I
Import duties VI - 6
amount of import duties VI - 6
collection of deficiency and refund of excess
deposits VI - 6
collection of deposits for import duties VI - 6
other payment arrangements VI - 6
remittance of collection VI - 6
validation of official receipt VI - 6
violation VI - 6
Insolvency or receivership of banks I - 67
definition of term I - 67
penalties and sanctions I - 67
prohibited acts I - 67
Interbank loans III - 34a
accounting procedures III - 34a
agreement for the enhanced interbank call loan
funds transfer system App. 21
intraday liquidity facility for the implementation
of settlement producers under App. 21a thru
the improved interbank call loan funds
transfer system (MIPS 2) App. 21b
Index - Page 9
INDEX
04.12.31
settlement procedures for interbank loan
transactions and purchase and sale of
government securities under repurchase
agreements with the BSP App. 21a
settlement procedures for interbank loan
transactions III - 34a
systems and procedures for interbank call loan
transactions III - 34a
Interest II - 19
disclosure of effective rates of interest II - 20
interest on deposits/deposit substitutes II - 19
time of payment of interest on time deposits/
deposit substitutes II - 19
treatment of matured time deposits/deposit
substitutes II - 19
Interest and other charges III - 8c
accrual of interest earned on loans III - 8d
escalation clause; when allowable III - 8c
floating rates of interest III - 8c
rate of interest in the absence of stipulation
III - 8c
Interlocking directorships and/or officerships
I - 31
interlocking directorships I - 31
interlocking directorships and officerships
I - 31
interlocking officerships I - 31
representatives of government I - 32
transitory provision I - 32
Internal control system I - 48b
confirmation of accounts I - 52
division of duties and responsibilities I - 49
dual control I - 50
independence of the internal auditor I - 52
independent balancing I - 48c
internal control procedures for dormant/
inactive accounts I - 53
joint custody I - 50
number control I - 51
other internal control standards I - 52
proper accounting records I - 48c
rotation of duties I - 51
signing authorities I - 50
Index - Page 10
INDEX
04.12.31
Investments in subsidiaries and affiliates abroad
III - 45
application for authority to establish or acquire
subsidiaries and affiliates abroad III - 45
conditions for approval of application III - 46
investment of a bank subsidiary in a foreign
subsidiary III - 46
requirements for establishing subsidiaries or
affiliates abroad III - 45
Investments in venture capital corporations
III - 42 see also Venture Capital Corporations
L
Lending institutions III - 32
Lending policies III - 1
large exposures and credit risk concentrations
III - 3
rules and regulations to govern the development
and implementation of banks' internal credit
risk rating systems III - 1
Liabilities III - 2a
Liberalized entry of foreign banks I - 10w
applicability to Philippine corporations I - 16
application forms for the entry of foreign banks
App. 2
capital requirements I - 12
applicable exchange rate I - 13
locally incorporated subsidiaries I - 12
foreign bank branch authorized to operate
as EKB I - 13
foreign bank branches with full banking
authority I - 12
foreign banks with existing branches I - 12
change from one mode of entry to another
I - 15
compliance with capital ratios I - 13
composition of capital accounts I - 13
guidelines for selection I - 11
guidelines for the issuance of an EKB authority
for branches of foreign banks App. 3
head office guarantee I - 14
limitations I - 14
listing of shares with the Philippine Stock
Exchange I - 15
Index - Page 11
INDEX
04.12.31
provisions for losses; booking III - 5
rediscounted papers included in loan limit
III - 3
sanctions III - 5
setting up of allowance for probable losses
App. 18
Loans and other credit accommodations secured
by chattels and intangible properties III - 14
Loans and other credit accommodations secured
by personal properties III - 15
Loans and other credit accommodations to
DOSRI III - 18
aggregate ceiling III - 23
applicability to branches and subsidiaries of
foreign banks III - 23
ceiling on unsecured loans, other credit
accommodations and guarantees III - 23
definitions III - 18
book value of the paid-in capital
contribution III - 20
directors III - 18
net worth III - 20
officers III - 18
related interest III - 19
secured loan, borrowing, or credit
accommodation III - 20
stockholders III - 18
subsidiary III - 19
substantial stockholder III - 19
total loan portfolio III - 20
unencumbered deposits III - 20
unsecured loan, borrowing or credit
accommodation III - 20
direct borrowing III - 22
exclusions from aggregate ceiling III - 20b
general policy III - 18
indirect borrowing III - 22
individual ceilings III - 22
exclusion from individual ceiling III - 22
procedural requirements III - 24
reportorial requirements III - 24
sanctions III - 24
transactions covered III - 20
transactions not covered III - 21
applicability to credit card operations
III - 21
Index - Page 12
M
Management contracts I - 58
Mandatory credits III - 26b
agrarian reform and agricultural credits
III - 26b
small enterprises III - 31
Manual of Accounts I - 40a
Market benchmarks/reference prices App. 33a
Memorandum of Understanding I - 8
prescribed format App. 30
INDEX
04.12.31
Merger or consolidation of banks I - 8c
definition of terms I - 8c
consolidation I - 8c
merger I - 8c
incentives I - 8d
requirement of BSP approval I - 8c
rules on exchange of shares I - 8d
Microfinancing loans III - 38
credit information exemption III - 39
definition III - 38
microfinancing loans III - 38
portfolio-at-risk (PAR) III - 38
refinanced loans III - 39
restructured loans III - 38
exemptions from rules on unsecured loans
III - 39
loan limit; amortization; interest III - 39
notes on microfinance App. 45
sanctions III - 39
Minimum working balances II - 15
Miscellaneous operations VI - 6
collection agents of PhilHealth VI - 7
collection and paying agents of the Social
Security System VI - 6
commercial banks as depository of
rediscounting proceeds VI - 7
N
NDC Agri-Agra Erap Bonds II - 17, II - 20,
III - 27, IV - 5, IV - 6a
O
Officers I - 30f
appointment of officers I - 30f
bio-data of officers I - 30k
compensation and other benefits I - 32a
confirmation of the election/appointments of
officers I - 30e
definition of officers I - 30f
Index - Page 13
INDEX
04.12.31
disqualification of officers I - 30f
disqualification procedures I - 30i
effect of non-possession of qualification or
possession of disqualifications I - 30h
persons disqualified to become officers I - 30h
qualifications I - 30f
watchlisting I - 30j
confidentiality I - 30j
delisting I - 30j
inclusion of directors/officers/employees in
the watchlist I - 30j
watchlist categories I - 30j
Open market operations VI - 1
repurchase agreements with BSP VI - 1
reverse repurchase agreements with BSP VI - 2
settlement procedures on the purchase and sale
of government securities under repurchase
agreements with the Bangko Sentral VI - 2
Other borrowings II - 35
borrowings from the government II - 35
exemption from reserve requirement II - 35
borrowings from trust departments or
investment houses II - 35
Other deposit operations II - 24
acceptance, encashment or negotiation of
checks drawn in favor of Commissioner/
Collector of Customs II - 26
automated teller machines II - 28
booking of cash deposits II - 24
booking of deposits after regular banking hours
II - 24
booking of deposits and withdrawals II - 24
booking of non-cash deposits II - 24
clearing cut-off time II - 24
definitions II - 24
regular banking hours II - 24
clearing cut-off time II - 24
deposit pick-up/cash delivery services II - 26
qualifying criteria before a RB/Coop Bank
engages in deposit pick-up services II - 27
disclosure of service and maintenance fees on
dormant accounts II - 25
general provision on sanctions II - 35
miscellaneous rules on deposits II - 25
certification of compliance with Subsection
55.4 of R.A. No. 8791 II - 25 see also
App. 49
Index - Page 14
insurance on deposits II - 25
specimen signatures II - 25
notice required II - 25
operation of armored cars II - 27
other records required II - 25
unclaimed balances II - 25
Other operations III - 48, VI - 1
clearing operations VI - 4f
collection of customs duties/taxes/levies and
other revenues VI - 4f
derivatives VI - 2
forward contracts with non-residents VI - 4e
miscellaneous operations VI - 6
open market operations VI - 1
Outsourcing of banking functions I - 58
duties and responsibilities of banks and their
directors/officers in all cases of outsourcing
of banking functions I - 58
other banking services for subsidiaries,
affiliates and related companies I - 61
outsourcing of information technology systems/
processes I - 58
outsourcing of other banking functions I - 60
prohibition against outsourcing certain banking
functions I - 58
service providers I - 61
review of subsisting outsourcing contracts I - 61
penalties I - 62
P
Parcellary plans on crop loans III - 52
Past due accounts III - 8d
accounts considered past due III - 8d
demand loans III - 8f
renewals/extensions III - 8f
restructured loans III - 8f
writing-off of loans as bad debts III - 8f
definitions III - 8f
advances III - 8f
bad debts III - 8f
loans III - 8f
other assets III - 8f
other credit accommodations III - 8f
writing-off microfinance loans as bad debts
III - 8f
INDEX
04.12.31
Philippine and Foreign Currency Notes and
Coins VI - 10a
clean note policy VI - 12
definition of terms VI - 10a
counterfeit coin VI - 10a
counterfeit note VI - 10a
legal tender Philippine currency VI - 10a
unauthorized reproduction of legal tender
Philippine coin VI - 10a
unauthorized reproduction of legal tender
Philippine note VI - 10a
replacement and redemption of mutilated or
unfit legal tender Philippine currency notes
and coins VI - 13
mutilated currency coin VI - 13
mutilated currency note VI - 13
unfit currency coin VI - 13
unfit currency note VI - 13
reproduction and/or use of facsimiles of legal
tender Philippine currency coins VI - 12
reproduction and/or use of facsimiles of legal
tender Philippine currency notes VI - 11
sanctions VI - 14
treatment and disposition of counterfeit
Philippine and foreign currency notes and
coins VI - 11
treatment of Philippine currency notes and
coins called in for replacement VI - 14
Place of board of directors' meeting I - 57
Profit sharing programs I - 32
Prohibition on the sale of foreign-based mutual
funds by banks VI - 14f
Prompt corrective action program I - 8
sanctions I - 8
Public I - 4
Public offering I - 4
Purchase of receivables and other obligations
III - 48
establishing the market benchmarks/reference
prices and computation method used to
mark-to market debt and marketable equity
securities App. 33a
Q
Quasi-banking functions II - 8e
certificate of authority from the BSP II - 9
definition of terms and phrases II - 8e
borrowing II - 8e
for the borrower's own account II - 8e
purchasing of receivables or other obligations
II - 8f
regularly engaged in lending II - 8f
relending II - 8f
elements of quasi-banking II - 8e
issuance of bonds II - 13
issuance of commercial papers II - 14c see also
App. 13 & 14
pre-conditions for the exercise of QBFs II - 9
scope of quasi-banking functions II - 8e
transactions not considered quasi-banking II - 8f
R
Readily marketable non-perishable staples III - 3
Real and other properties owned or acquired
(ROPOA) III - 50
appraisal of properties to be foreclosed or
acquired III - 50
booked valuation reserves while the account is
in the non-performing portfolio III - 50
non-cash payment for interest III - 51
Recognition and derecognition of domestic credit
rating agencies for bank supervisory purposes
VI - 20
derecognition of credit rating agencies VI - 23
inclusion in bsp list VI - 23
minimum eligibility criteria VI - 20
credibility VI - 21
disclosure requirements VI - 21
independence VI - 21
Index - Page 15
INDEX
04.12.31
internal compliance procedures VI - 22
objectivity VI - 21
organizational structure VI - 20
resources VI - 20
transparency VI - 21
pre-qualification requirements VI - 22
recognition of PhilRatings as domestic credit
rating agency for bank supervisory purposes
VI - 23
recognition of positions arising from banks'
foreign currency options in the computation
of net open FX position V - 7
statement of policy VI - 20
Records I - 40
adoption of the manual of accounts I - 40a
retention and disposal of records of rural/
cooperative banks I - 41 see also App. 50
statements of financial accounting standards
I - 41
Redemption of foreclosed real estate mortgage
III - 14
Rediscounting II - 28
credit examination of borrowing banks II - 30b
interlocking directorship/officership II - 30c
loan value II - 30a
maturities II - 30a
microcredit (MCR) line II - 34b
penalties/sanctions II - 30b
prohibited transactions II - 30b
rediscount ceiling II - 30
rediscount/lending rates and liquidated damages
II - 30a
rediscounting line II - 30
rediscounting window available to rural and
cooperative banks for the purpose of
providing liquidity assistance to support and
promote microfinance programs II - 34a
accounts verification II - 34d
documentary requirements II - 34c
eligibility requirements II - 34a
microcredit (MCR) line II - 34b
remittance of collections/payments/
repayments II - 34c
reports required II - 34d
sanctions II - 34d
Index - Page 16
INDEX
04.12.31
Repurchase agreements with the BSP
II - 30d, VI - 1
delivery VI -2
rate VI -1
repurchase agreements involving foreign
currency-denominated government securities
V-9
security VI -1
term VI -1
Reserves II - 20
accounts subject to reserves; amounts required
II - 20
allowable drawings against reserves II - 22
book entry method for reserve securities II - 22
composition II - 21
computation of reserve position II - 22a
exclusion of uncleared checks and other cash
items II - 22
exemptions from reserve requirements II - 22
guidelines in calculating and reporting to the
BSP the required reserves on deposit
substitutes evidenced by repurchase
agreements covering government securities
II - 22a
interest income on reserve deposits II - 22 see
also App. 54
liquidity reserves II - 20
measurement of reserve requirement II - 22a
regular reserves against deposit and deposit
substitute liabilities II - 20
report on compliance II - 24
reserve-eligible and non-eligible securities
App. 15
reserves against peso-denominated Common
Trust Funds and Trust and Other Fiduciary
Accounts - Others IV - 6
composition of reserves IV - 6b
computation of reserve position IV - 6b
Reserve deficiences; sanctions II - 22a
chronic reserve deficiency; penalties II - 23
failure to cover overdrawings with the BSP
II - 23
payment of penalties on reserve deficiencies
II - 23
Restructured loans III - 16e
classification III - 18, see also App. 18
Index - Page 17
INDEX
04.12.31
multilateral development banks I - 10j
non-central government public sector entity
of a foreign country I - 10j
note issuance facilities and revolving
underwriting facilities I - 10j
other commitments I - 10j
other commitments with an original maturity
of up to one (1) year I - 10j
partly-paid shares and securities I - 10j
perpetual preferred stock I - 10j
Philippine local government units I - 10j
Philippine national government I - 10j
Private sector I - 10j
redeemable preferred stock I - 10j
sale and repurchase agreements and asset
sales with recourse I - 10k
solo basis I - 10k
subsidiary I - 10k
treasury shares I - 10k
guidelines to incorporate market risk in the riskbased capital adequacy framework App. 46
implementation plans under the new
international capital standards as contained
in the basel committee on banking
supervision (BCBS) document international
convergence of capital measurement and
capital standards App. 63
market risk capital requirement I - 10k
minimum ratio I - 9
qualifying capital I - 9
required reports I - 10k
risk-weighted assets I - 10c
sanctions I - 10k
temporary relief I - 10l
S
Savings deposits II - 4a
rental deposits of lessees II - 4c
servicing deposits outside bank premises II - 4a
withdrawals II - 4b
Secured loans III - 12
eligible real estate collaterals on RB/Coop
Bank loans III - 12a
foreclosure by rural/coop banks III - 14
foreclosure by TBs III - 13
insurance on real estate improvements III - 13
Index - Page 18
INDEX
04.12.31
limits of stockholdings in a single bank I - 16
other foreign equity investment in domestic
banks I - 19
shares of stock of universal/commercial banks
I - 22
limits on stockholdings in several banks
I - 22
shares of stock of RBs and Coop Banks I - 22a
convertibility of preferred stock to common
stock I - 23
equity investment by holding corporations
I - 24
government-held shares I - 22a
limits on stockholdings in several RBs I - 23
moratorium on ownership ceiling I - 22a
shares of stock of TBs I - 22a
moratorium on ownership ceilings I - 22a
preferred shares I - 22a
stock options/warrants I - 22
transfer of shares I - 17
duties of a corporate secretary I - 17
requirement for newly established banks
I - 19
transfers requiring prior MB approval I - 18
unlawful and void transactions involving
voting stocks of banks I - 17
Single borrower's limit III - 2
Small enterprises credits III - 31
accreditation guideliness for rural and thrift
banks under the SULONG III - 34 see also
App. 55
definition of terms III - 31
lending institutions III - 32
loan portfolio III - 32
small and medium enterprises III - 32
eligible investments III - 33
guarantee coverage III - 34
ineligible instruments III - 33
lendings to medium enterprises III - 34
mandatory allocation of credit resources to
small and medium enterprises III - 32
sanctions III - 34
small enterprises III - 31
submission of reports III - 34
Special types of loans III - 34a
T
Tellering booths I - 39
Time deposits II - 6
certificates of time deposit II - 7
negotiable certificates of time deposit II - 7
non-negotiable certificates of time deposit
II - 7
insurance coverage II - 7
long-term NCTD II - 8
long-term non-negotiable tax-exempt CTDs
II - 8e
minimum features II - 7
special time deposits II - 6
term II - 6
Transitory provisions III - 26a
reportorial requirements III - 26b
Trust and other fiduciary business IV - 3
authority to perform trust and other fiduciary
business IV - 3
application for authority to perform trust and
other fiduciary business IV - 3
FCDU/EFCDU trust accounts IV - 20
additional deposit for the faithful
performance of trust duties IV - 21
applicability of rules and regulations IV - 21
banks with trust authority IV - 20
banks without trust authority IV - 21
liquidity requirement for FCDU/EFCDU
CTFs IV - 21
organization and management IV - 7
composition of trust committee IV - 8
organization IV - 7
Index - Page 19
INDEX
04.12.31
qualifications of committee members,
officers and staff IV - 8
responsibilities of administration IV - 8
prerequisites for engaging in trust and other
fiduciary business IV - 4
pre-operating requirements IV - 5
required capital IV - 3
required surplus IV - 21
security for the faithful performance of trust and
other fiduciary business IV - 5
basic security deposit IV - 5
compliance period; sanctions IV - 6
composition of reserves IV - 6b
computation of reserve position IV - 6b
eligible securities IV - 5
Registry of Scripless Securities App. 34
report of compliance IV - 7
reserve deficiencies; sanctions IV - 7
reserves against peso-denominated common
trust funds IV - 6a
valuation of securities and basis of
computation of the basic security deposit
requirement IV - 6
trust and other fiduciary business regulations
IV - 12
authority IV - 3
ceilings on loans IV - 13
funds awaiting investment or distribution
IV - 13
lending and investment disposition IV - 12a
minimum documentary requirements IV - 12
operating and accounting methodology
IV - 13
other applicable regulations on loans and
investments IV - 13
qualification and accreditation of private
banks acting as trustee on any mortgage
or bond issuance by any municipality,
government-owned or controlled
corporation, or any body politic IV - 14
qualification requirements for bank/NBFI
applying for accreditation to act as trustee
on any mortgage or bond issued by any
municipality, government-owned or controlled corporation, or any body
politic App. 5b
tax-exempt individual trust accounts IV - 13
transactions requiring prior authority IV 12a
Index - Page 20
INDEX
04.12.31
exposure limit to single person/entity IV - 18a
foreign currency-denominated unit investment
trust funds IV - 18c
minimum disclosure requirements IV - 18
operating and accounting methodology IV - 16
other related guidelines on valuation of
allowable investments IV - 18b
plan rules IV - 17
relationship of trustee IV - 16
unit investment trust fund administration
support IV - 18b
required surplus IV - 21
sanctions IV - 28
scope of regulations IV - 1
general provisions IV - 1
investment management activities IV - 1
trust and other fiduciary business IV - 1
statement of principles IV - 1
"Truth in Lending Act" Disclosure
Requirement III - 8g
definition of terms III - 9
amounts to be financed III - 9
cash price or delivered price III - 9
down payment III - 9
finance charge III - 9
non-finance charges III - 9
person III - 9
simple annual rate III - 9
trade-in III - 9
format of abstract of "Truth in Lending Act"
App. 20
information to be disclosed III - 10
inspection of contracts covering credit
transactions III - 10
posters III - 10
transactions covered III - 19
transactions not covered III - 20
U
Unclassified loans App. 18 - 1
Unclaimed balances II - 25
Unimpaired capital and surplus III - 3
Unit Investment Trust Funds/Common Trust
Funds IV - 16
administration IV - 6
allowable investments and valuation IV - 18a
counterparties IV - 18b
definitions IV - 16
board of directors IV - 16
trust entity IV - 16
unit investment trust funds IV - 16
establishment IV - 16
exemptions from statutory and liquidity
reserves, single borrowers limit, DOSRI
IV - 18c
V
Venture capital corporations III - 42
business name of VCCs III - 43
equity investments of VCCs III - 43
examination by bsp
interlocking directorships and/or officerships
III - 43
investments in VCCs III - 42
reportorial requirements III - 43
requirements for investors III - 42
Index - Page 21
INDEX
04.12.31
Voluntary liquidation I - 66
final liquidation report I - 67
liquidation plan I - 66
prior Monetary Board approval I - 66
W
Waiver of secrecy of deposit III - 25
Without recourse transactions II - 14
delivery of securities II - 14
sanctions II - 14a
securities custodianship operations II - 14a
Index - Page 22