Guidelines for Trust Departments’ Placements in the SDA

MEMORANDUM NO. M-2007-011

To :  ALL BANKS AND NON-BANK FINANCIAL INSTITUTIONS AUTHORIZED TO ENGAGE IN TRUST BUSINESS

Subject : Guidelines for Trust Departments’ Placements in the SDA Facility of BSP

The following guidelines shall be observed in the implementation of the Monetary Board Resolution Nos. 433 and 518 dated 19 April 2007 and 3 May 2007, respectively, which allowed the trust departments of banks and non-bank financial institutions authorized to engage in trust business, to deposit with BSP.

1. Access to the subject BSP facility shall be granted upon receipt by the BSP Treasury Department (BSP-TD) of a letter of request (Annex 1) for account opening together with the following requirements:

a. Internal approvals allowing the trust department to invest in the BSP SDA facility; b. A list of authorized signatories; c. A list of authorized traders; and d. Contact details for the front and back offices.

2. The trust department shall use a depository institution that is a PhilPASS member when placing its funds in the SDA facility. On transaction date, the trust department shall instruct said depository institution to debit their account in favor of their SDA with the BSP. Similarly, the trust department shall specify a PhiiPASS member to which its principal and interest will be credited at maturity of the SDA placement.

3. Trading hours shall be from IO:00 am to 3:OO pm for all business days. All trades shall settle on trade date.

4. Applicable tenors and pricing shall be based on published rates (i.e. in Bloomberg’s CBPHI and Reuters BANGKO page.)

5. The existing tiering scheme, as detailed below shall be applied to the SDA placements of the trust departments separately from the placements of their bank proper.

Tier

Tiered Rate

Amounts less than or equal to P5 billion

BSP published rate

Amounts in excess of P5 billion up to PI0 billion

BSP published rate less 2%

Amounts in excess of PI 0 billion

BSP published rate less 4%

6. The minimum placement is P10.0 million with the additional amounts in increments of PI .O million.

7. Trust departments may place only once per tenor per day

8. Trust departments may pre-terminate their SDA placements, either fully or partially. If the holding period of the SDA placement when it is rate pre-terminated is less than 50% of the original tenor of the said placement, the applicable interest rate for the pre-terminated amount will be the rate dealt on value date less two percent (2%) p.a. If the holding period is 50% or more of the original tenor, the applicable interest rate for the pre-terminated amount will be the rate dealt on value date less one percent (1%) p.a. The pre-termination rate shall apply only to the amount pre-terminated.

9. The income from the SDA is subject to a 20% final withholding tax

10. Depository institution shall generally follow the existing settlement process for SDA placements with BSP of banks. The trust department will be required to send the transaction confirmation directly to the BSP-TD back office. A sample confirmation is attached as Annex 2.

ll. Trust departments may request a statement from the BSP-TD for their outstanding SDA placement as of a specified date.

For other operational details or any inquiry/clarification on these guidelines, kindly contact the following BSP Treasury Department personnel

Name

E-Mail Address

Contact Numbers

Ms. Ma. Mediatriz M. Boelsch

[email protected]

Direct Lines: 5238863      5258437 5257140      5262214 5238901

Trunk Line: 5247011 local 2865

Fax Number: 5238772

Ms. Ma. Josefina F. Tinio

[email protected]

Mr. Nesmin V. Gutierrez

[email protected]

Name

E-Mail Address

Contact Numbers

Ms. Jeannette C. Siguenza

[email protected]

Direct Lines: 5235295

Trunk Line: 5247011 local 2770

Fax Number: 5233348

Mr. Albert S. Bautista

[email protected]

Ms. Ma. Candelaria J. Cristobal

[email protected]

Please be guided accordingly.

FOR THE MONETARY BOARD:

NESTOR A. ESPENILLA, JR. Officer-in-Charge