Calculation of a bank/NBQB reserve position during the reserve weeks 24 to 30 December 2004 and 31 December 2004 to 6 January 2005

MEMORANDUM Series of 2004

TO       :  All Banks and Non-Banks Financial Institutions with Quasi-Banking Functions

As provided under Proclamation No. 750 of the Office of the President declaring 24 and 27 December 2004 as  special non-working holidays and 30 December as special holiday, the following shall be observed in the calculation of a bank/NBQB reserve position during the reserve weeks 24 to 30 December 2004 and 31 December 2004 to 6 January 2005:

1.   24 and 27 December 2004 are considered as non-reserve days for the reserve week 24 to 30 December 2004.  The bank's/NBQB's reserve position as calculated as of end of business of 23 December 2004 shall be carried forward to 24 to 27 December 2004.

2.   For reserve week 31 December 2004 to 6 January 2005, 31 December 2004 is also considered a non-reserve day thus the reserve position as computed as of 29 December 2004, the end of business day, shall be carried forward to 30 December 2004 to 2 January 2005.

3.   The reserve weeks, 24 to 30 December 2004 and 31 December 2004 to 6 January 2005 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 that reserve week.

4.   As to the utilization of the bank's Cash-In-Vault (CIV) as available reserves for the purpose of determining compliance with the minimum reserve requirement as provided under Circular Letter dated 5 April 2002, the bank's CIV as of end of business day of 23 December 2004 shall be used as reserve cover for 28 December 2004 while the CIV balance as of 29 December 2004 as a component of available reserves shall be utilized as reserve compliance for 3 January 2005.

For information and guidance.

ALBERTO V. REYES Deputy Governor