Amendments to Part Two, Chapter I of Circular 1389 dated April 13, 1993

CBP CIRCULAR NO. 1393 Series of 1993

Pursuant to MB Res. No. 518 dated June 18, 1993, Part Two, Chapter I of Circular 1389 dated April 13, 1993 (Consolidated Foreign Exchange Rules and Regulations) is hereby amended as follows:

1. To delete Section 23.4 thereof and renumber Section 23.5 accordingly.

2. To amend Section 24.5 to read as follows:

"5. Short term loans of private exporters/importers from Offshore Banking Units (OBUs) and other offshore sources/creditors, provided that:

a. The loans are not covered by a guarantee from a government financial institution/corporation;

b. The loans shall be exclusively used to finance specific trade transactions i.e. to liquidate/pay for import obligations and/or in the case of export financing transactions, to fund the borrower's pre-export financing requirements;

c. Proceeds of loans intended to pay for foreign exchange requirements shall be paid directly to the supplier/creditor while amounts intended to fund pre-export peso costs shall be inwardly-remitted and sold to the banking system;

d. The loans shall be granted against CS approved short-term relending programs of foreign creditors. Creditors shall submit to the Central Bank their short-term relending program for Philippine borrowers indicating their proposed credit limit together with a list of prospective borrowers/beneficiaries. These relending programs shall be valid for one year but shall be subject to semi-annual review if commitments and/or utilization for the semester shall be below 50% of total relending limit;

e. Drawdown and registration requirements under Section 27 and 28 hereof shall be complied with;

f. Any assignment of the loan by the creditor concerned shall require prior Central Bank approval; and

g. The borrower shall submit to the Central Bank documents cited in attached Appendix 8, as amended, at least five (5) days after its credit line is approved by the creditor."

3. To delete Section 30.2c thereof.

This Circular shall take effect immediately.

For the Monetary Board:

JOSE L. CUISIA, JR. Governor