Guidelines on the Use of Scripless Securities as Security for the Faithful Performance of PERA Administrator (Appendix 34a/Q-21-a to Subsec.X405.1/4405Q.1 of the MORB/MORNBFI)

BANGKo SENTRAL NG PILIPINAS OFFICE OF THE GOVERNOR CIRCUIAR NO. 87s Series of 2015 Subject : Guidelines on the Use of Scripless Securities as Security for the Faithful Performance of PERA Administrator (Appendix 34ale-2L-a to Subsec. x4os.tl 44o5Q. 1 of the MORB/MORNBF|) The Monetary Board in its Resotution No. 509 dated 27 March 2015 approved the introduction of Appendix 34a to Subsec. X405.1 of the Manual of Regulations for Banks (MORB) and Appendix Q-21-a to Subsec. 4405Q.1 of the Manual of Regulations for Non-Bank Financial lnstitutions (MORNBFI), relative to the implementation of PERA Act of 2008 and pERA Rules. Definition of Terms and Acronyms BSP - Bongko Sentrol ng pilipinas BSP-FAD - Financial Accounting Department of the BSp 85P-5ES - Supervision and Examination Sector of the BSp DDA - refers to the regular demand deposit account of a bank/quasi-bank with BSp-FAD DSSA - Daily Statement of Securities Account Financial lnstitution (Fl) - refers to a ban( non-bank financial institution, or trust entity supervised by the BSP that is accredited to be a pERA Administrator MORB/MORNBFI - Manual of Regulations for Banks/ Manual of Regulations for Non-Bank Financial Institutions off-site Supervising Department - refers to the department of the Bsp-sEs responsible for off- site supervision of Fls Scripless securities - refers to uncertificated securities issued by the Bureau of Treasury (BTr) that are under the BTr's Registry of scripless securities (Ross) Trust Speciolist Group (TsG) - refers to the technical unit of the BSp-SES responsible for supervision of trust entities

Basic Requirements 1. The BSP-SES shall file with the BTr an application to open a BSP-PERA RoSS principal securities account where the securities for the faithful performance of pERA Administrator shall be held. The BSp-sES shall use Annex 1 for this purpose. 2. The BSP-SES through its TSG shall request with the BTr the creation of a pERA Administrator securities account under the BSP-PERA RoSS principal securities account using Annex 1-A. The BTr shall maintain each PERA Administrator securities account for P1,000.00 or any amount per month as may be determined by the BTr. 3. An Fl must have a DDA with BSP-FAD. In case when an Fl does not have a DDA with BSP-FAD, it shall designate a settlement bank and shall inform the appropriate BSp-SES off-site supervising department of its designated settlement bank. 4. Each Fl shall accomplish an autodebit/autocredit authorization for its PERA Administrator securities account under the BSP-PERA RoSS principal securities account. The document shall authorize the BTr and the BSP to credit the DDA of the Ft or the designated settlement bank with BSP-FAD for coupons/interest payments and maturity proceeds of securities and to debit the same DDA for the monthly fees payable to the BTr for maintenance of the PERA Administrator securities account. An Fl with a DDA with BSP-FAD shall use Annex 2-A while an Ft with a settlement arrangement shall use Annex 2-B. 5. The BSP-SES off-site supervising department shall be responsible for monitoring deposit and withdrawal of securities in the PERA Administrator securities account. Every Fl shall ensure that it has adequate security for the faithful performance of pERA Administrator pursuant to the provisions of the Personal Equity and Retirement Account (PERA)Act of 2008 and its implementing rules and regulations. 7. The BTr shall provide TSG a monthly statement of securities account as well as a DSSA whenever a transaction in any PERA Administrator securities account is made. 8. The responsible BSP-SES off-site supervising department shall determine on a quarterly basis the compliance with the security for the faithful performance of PERA Administrator based on the reportorial submission of the Fl. In case of deficiency, the responsible BSP-SES off-site supervising department shall recommend, as warranted, the imposition of sanctions and/or any other appropriate action to higher BSp authorities. B. Procedures for Assigning Initial/ Additional RoSS Securities as Security for the Faithful Performance of PERA Administrator L. The Fl shall notify the appropriate BSP-SES off-site supervising department that it will transfer RoSS securities to its PERA Administrator securities account at least two (2) banking days before the date of transfer using the prescribed form (Annex 3) and checking Box "A" or "8", as appropriate, and indicating details therein. The notice, which may initially be sent through electronic mail or fax, shall be forwarded as an official letter duly signed by authorized officer/s and shall be accompanied by the following:

A. Computation of compliance with the security for the faithful performance of PERA Administrator. The Fl shall provide detailed calculation on specific and relevant dates whenever there is a transfer of RoSS securities to and from its PERA Administrator securities account using Annexes 4 and 4-a to affirm the continuing compliance with the security requirement; and B. Notarized certification signed by the chief executive officer of the Fl using Annex 5 attesting: i' The accuracy and completeness of submitted reports and corresponding schedules; and ii' The effective interest rate method is being used in the amortization of relevant premium/discount of securities in compliance with the Philippi ne accounting standards. This notarized certification shall likewise be submitted to the appropriate BSp- SES off-site supervising department every quarter to attest the continuing compliance of the Fl to the security requirement. 2. The Fl shall instruct the BTr to transfer RoSS securities to its pERA Administrator securities account on specified date. 3. The BTr shall effect the transfer upon verification of RoSS balances. At the end of the day, the BTr shall transmit a DSSA to TSG containing the transfer. 4. The TSG shall provide the appropriate BSP-SES off-site supervising department a copy of the DSSA. 5. The responsible BSP-SES off-site supervising department shall verify from the DSSA the transfer of securities indicated in the advice (Annex 3) sent earlier by the Fl. 6. The above procedures shall also be observed in transferring additional securities to replace maturing/matured RoSS securities. c. Procedures for Withdrawing RoSS Securities 1. The Fl shall notify the appropriate BSP-SES off-site supervising department that it will withdraw existing RoSS securities assigned as security for faithful performance of PERA Administrator at least two (2) banking days before the date of withdrawal using the prescribed form (Annex 6) and indicating the details of the securities to be withdrawn. The notice shall be accompanied by a computation of compliance with security requirement and certification required under 8.1. 2. The responsible BSP-SES off-site supervising department shall verify if the securities to be withdrawn are in the PERA Administrator securities account and the value of outstanding securities remains compliant with the security requirement after the withdrawal. The department concerned shall immediately inform the Fl for any discrepancy/deficiency. lf in order, the department concerned shall authorize TSG to instruct the BTr to transfer the securities to be withdrawn to the RoSS account of the Fl. The BSP-SES off-site supervising department shall use Annex 7 and check boxes ,,B,, and "C"' The authority to allow the withdrawal should be transmitted to TSG one (1) banking day before the date of withdrawal indicated in the advice (Annex 6) sent earlier by the Fl.

The BSP-SES off-site supervising department shall also advise the Fl that it has approved the withdrawal of security using Annex g and checking boxes ,'8,, and,'c,,. 3. The TSG shall instruct the BTr within the same day to transfer the securities specified to be withdrawn from the PERA Administrator securities account to the RoSS account of the Fl using annex 9. The BTr shall acknowledge receipt of the confirmation of transfer of government securities (sans consideration). 4. The BTr shall effect the transfer/withdrawal and shall send a DSSA to TSG containing the transfer/withdrawal. The TSG shall provide the appropriate BSP-SES off-site supervising department a copy of the DSSA. The responsible BSP-SES off-site supervising department shall verify from the DSSA the transfer of securities indicated in the advice (Annex 6) sent earlier by the Fl. 7. The above procedures shall also be observed in withdrawing and replacing existing and/or maturing/matured RoSS securities. D. Procedures for Replacing RoSS Securities t. The Fl shall notify the appropriate BSP-SES off-site supervising department that it will replace existing and/or maturing/matured RoSS securities assigned as security for the faithful performance of PERA Administrator at least two (2) banking days before the date of replacement using the prescribed form (Annex 3). The Fl shall check box ',C,, of the form and indicate the details of the securities to be replaced. The notice shall be accompanied by a computation of compliance with security requirement and certification required under B.1. The responsible BSP-SES off-site supervising department shall verify if the securities to be replaced are in the PERA Administrator securities and the value of the outstanding securities remains compliant with the security requirement after the replacement. The department concerned shall immediately inform the Fl for any discrepancy/deficiency. The procedures for assigning additional RoSS securities specified in sections B.2 to 8.5 of this Appendix shall herein apply. 4. The BSP-SES off-site supervising department shall use Annex 7 and check boxes ,,A,, and "C". Should there be any discrepancy/deficiency, the BSP-SES off-site supervising department shall immediately inform the Fl. The authority to allow the replacement shall be transmitted to TSG not later than the day when the replacement securities were transferred to the pERA Administrator securities account. The BSP-SES off-site supervising department shall also advise the Ft that it has approved the replacement of security by using Annex 8 and checking boxes ,,A" and ,,8,, . 5. The procedures for withdrawing RoSS securities specified in sections C.3 to C.6 of this Appendix shall herein apply.

E. Procedures for Crediting Interest and Maturity Proceeds of Securities 1. on coupon or interest payment date, the BTr shall instruct BSP-FAD to credit the DDA of the Fl or its designated settlement bank for coupon/interest payment of securities held in the PERA Administrator securities account. 2. On maturity date, the BTr shall instruct BSP-FAD to credit the DDA of the Fl or its designated settlement bank for maturity proceeds of securities held in pERA Administrator securities account. 3. The appropriate BSP-SES off-site supervising department shall determine if the value of the outstanding securities remains compliant with the security requirement after the maturity of securities. The department concerned shall immediately inform the Fl for any discrepa ncy/deficiency. 4. When the value of security falls below the required level, the Fl shall instruct the BTr to transfer securities from the Fl's own RoSS account to its PERA Administrator securities account under the BSP-PERA RoSS principal securities account. The procedures specified in sections B.l to 8.5 of this Appendix shall herein apply. This Circular shall take effect fifteen (15) days following its publication in the Official Gazette or in any newspaper of general circulation. FOR THE MONETARY BOARD: M. TETANGCO, JR. 7Z *^y zos

APPENDIX 34alQ-2ta Annex 1 SUPERVISION AND EXAMINATION SECTOR (Date) Treasurer of the Philippines The Bureau of the Treasury Cabildo Street corner A. Soriano Avenue and Sto. Tomas Street, Intramuros Manila Attention: Reeistrv of Scripless Securities (RoSS) Dear The Supervision and Examination Sector of the Bangko Sentral ng pilipinas hereby makes an application to open a Principal Securities Account in the Registry of Scripless Securities (RoSS) to hold government securities earmarked in favor of the BSP as security for the faithful performance by pERA Administrators of their duties set forth in the Personal Equity and Retirement Account (PERA) Act of 2008 (BSP-PERA). We understand that the Bureau of Treasury shall maintain the Principal Securities Account of BSP-PERA for free. Very truly yours, Deputy Governor

APPENDIx 34alQ-2ta Annex 1-A SUPERVISION AND EXAMINATION SECTOR (Date) Treasurer of the philippines The Bureau of the Treasury Cabildo Street corner A. Soriano Avenue and Sto. Tomas Street Intramuros Manila Registrv of Scripless Securities (RoSS) Dear Ms. In connection with the BSP-PERA Principal Securities Account of the Bangko Sentral ng pilipinas- Supervision and Examination Sector in the Registry of Scripless Securities (RoSS), please open pERA Administrator Securities Account for the following trust entities/banks so we can MONITOR the security for the faithful performance of their duties set forth in the personal Equity and Retirement Account (PERA) Act of 2008. Please note that the settlement bank of the ENTlTy, if it is required, is also indicated. Name of Trust Entity/Bank Name of Settlement Bank, where required 1. 2. 3. we understand that the Bureau of Treasury will maintain the pERA Administrator securities Account for (AMOUNT) per month per account. Very truly yours, Authorized Signatory Page 2 of L2

APPENDIx 34ale-21a Annex 2-A Letterhead of Financial Institution AUTODEBTT/AUTOCREDTT AUTHORTZATTON The (Name of Financial Institution) hereby authorizes the Bureau of Treasury (BTr) and the Bangko Sentral ng Pilipinas (BSP) to debit/credit our demand deposit account (DDA) with BSp-Financial Accounting Department for coupons/interest payment of our securities held in our RoSS accounu and to settle the payment of monthly maintenance fees to the BTr in our pERA Administrator Securities Account. we also authorize the BTr and the BSP to credit our DDA with BSp-Financial Accounting Department for the redemption proceeds of our securities in the event such securities mature while in our RoSS account. This authorization will take effect on (indicate date) (Authorized Signatory)

APPENDIX 34aTQ-2Ia Annex 2-B To be used bv an Fl with settlement arrangement with a bank Letterhead of Financial Institution AUTODEBTT/AUTOCREDTT AUTHORTZATTON The (Name of Settlement Bank) for the account of (Name of Financial Institution) hereby authorizes the Bureau of Treasury (BTr) and the Bangko sentral ng pilipinas (BSp) to deuit/irectit our demand deposit account (DDA) with BSP-Financial Accounting Department for coupons/interest payment of securities of (Name of Financial Institution) in its designated RoSS account; for maturing securities of the (Name of Financial lnstitution) held in its designated RoSS account with the BTr; and to settle the payment of monthly maintenance fees to the BTr of our pERA Administrator securities Account. The (Name of Financial lnstitution) also authorizes the BTr and the BSp to credit the account of the settlement bank with BSP-Financial Accounting Department for the redemption proceeds of our securities in the event such securities mature while in our Ross account. This authorization will take effect on (indicate date) (Authorized Signatory of Settlement Bank) (Authorized Signatory of Financial Institution) Page 4 of !2

APPENDfX 34alQ-2la Annex 3 Letterhead of Financial Institution Date: The Director Name of Off-site Supervising Department Bangko Sentral ng pilipinas A. MabiniSt., Manila Dear Sir: we are transferring on (indicate date of transfer) the following securities to our pER/A Administrator Securities Account as our security for the faithful performance of pERA Administrator pursuant to Republic Act No. 9505 also known as the Personal Equity and Retirement Account (PERA) Act of 200g and its implementing rules and regulations. Tvoe lslN Purchase lssue Date Due Date Remainine Face purchase Date renor"/ Amount price We are transferring the above securities: a. tr As our initial security b. tr As an additional security c. tr To replace the following security/ies which we earmarked on (date) . Tvpe lSlN tssue pate pue pate Face Purchase ffi ffi Amount Price d.tr To replace matured securities the redemption value in the amount of p is credited to our deposit account or that of our settlement bank with BSP-Financial Accounting Department. Very truly yours, Name and Designation of Authorized Signatory a/ Reckoned from actual date oftransfer/withdrawal

APPENDIX 34alQ-2la Annex 4 Name of Financial Institution Computation of Security for the Faithfut performance of PERA Administrator As of (datel FoR THE qUARTER ENDED IDateI lst Month 2nd Month 3rd Month Average A COMPUTATIOI{ OF AVERAGE BATANCES 1 Securities Hefd by the PERA Administrator p - p - p _ p B SECURITY REQUIREMENT Book Value 1 Security Requirement (1%ofA.1 (Ave.) above 1/ As of lTransactlon datel 2 InventoryofoutstandingsecuritiesheldbythePERAAdministrator(BeginningBalance) (Face Value P_ million) 3 Add (Subtract) Securities earmarked (matured/replaced) (Face Value P_ million) 4 Outstanding Securities held by the pERA Administrator (Ending Batanc€t (Face Value p_ million) s ExcEss (DEFtCtEfrcYl 1/ For multiple transaction dates, the Fl shall provide separate calculation ofAnnex 4-A for each specific and relevant dates.

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APPENDfX 3alQ-Zta Annex 5 {NAME OF F|NANCIAL |NST|TUT|ON) CERTIFICATION (Date) Pursuant to the requirements of Appendix 34a/e_21a of the Manual of Regulations for Banks/ Manual of Regulations for Non-Bank Financial Institutions, I hereby certify the following: 1. The computation of security for the faithful performance of pERA Administrator and relevant schedule of inventory of outstanding securities under RoSS are true and accurate; and 2' The effective interest rate method is being used in the amortization of relevant premium/discount of securities in compliance with the Philippine accounting standards. Authorized Officer/ Signatory

APPENDTX 34alQ-2!a Annex G Letterhead of Financial Institution Date: The Director Name of Off-site Supervising Department Bangko Sentral ng pilipinas A. MabiniSt., Manila Dear Sir: we hereby advise you of our decision to withdraw on (indicate date of transfer) the following securities used as security for the faithful performance of pERA Administrator from our pERA Ad ministrator Securities Account. Tvoe lSlN Purchase lssue Date Due Date Remaining Face purchase Date Tenor"/ Amount price Very truly yours, Name and Designation of Authorized Signatory a Reckoned from actual date of transfer/withdrawal

APPENDT* *1"1"'li MEMORANDUM Name of Off-site Supervising Department For The Head Trust Specialist Group From The Authorized Officer Subject scripless securities for the Faithful performance of pERA Administrator Date In connection with the reguest of (indicate name of Financial Institution) dated _ to: a. tr Replace outstanding RoSS securities b. tr Withdraw RoSS securities You are hereby authorized to: c' tr Instruct the Bureau of Treasury to transfer the following securities to the RoSS Account of (Name of Financial Institution). Tvpe lSlN Purchase lssue Date Due Date Remainine Face purchase Date renor./ Amount price Authorized Signatory ' Reckoned from actual date of transfer/withdrawal

APPENDfX 34alQ-2ta Annex 8 NAME OF OFF.SITE SUPERVISING DEPARTMENT (Date) (Name of Financial Institution) (Address) Subject: Dear _: we are pleased to inform you that we have approved your request dated _ to: a. tr Replace outstanding RoSS securities b. tr Withdraw RoSS securities Accordingly, we have authorized the Trust Specialist Group to: c. El Instruct the Bureau of Treasury to transfer the following securities to your accounts Very truly yours, Authorized Signatory Page \L of L2

TRUST SPECIALIST GROUP Transaction No. Value Date 2O1X The Director Liability Management Service The Bureau ofthe Treasury Cabildo Street corner A. Soriano Avenue and Sto. Tomas Street, Intramuros, Manila Attention: Registry of Scripless Securities (RoSS) Subject: CONFIRMATION OF TRANSFER OF GOVERNMENT sEcuRtTtEs (GS) SANS CONSTDERATTON The does hereby coNFlRM that it has TRANSFERRED SANS CoNstDERATtON unto (Name of Financial Institution) the following described government security held by the Bureau of Treasury under the Registry of scripless securities (Ross) system. lssue Due Type/lSlN Face Amount Purchase Price Date Date (NAME OF AUTHORTZED S|GNATORY) Designation REGISTRY OF SCRIPLESS SECURTTIES This is to acknowledge receipt of the Confirmation of Transfer of Government securities (sans Consideration) of BanRko sentral ns pillpinas Examination Sector. BSp-pERA. - supervision and RoSS Bureau of the Treasury Page 72 of L2