Year 2000 Contingency Measures for the Banking Industry

CIRCULAR LETTER Series of 1999

TO : All Banks

SUBJECT: YEAR 2000 CONTINGENCY MEASURES FOR THE BANKING INDUSTRY

Pursuant to Monetary Board Resolution No. 1606, dated November 5, 1999, the Bangko Sentral ng Pilipinas announces its Year 2000 readiness, its banking hours during the contingency period and the contingency measures during the crossover period.

A. Definition of Terms

Contingency Period — The contingency period shall be from December 1, 1999 to January 15, 2000.

Crossover Period — The crossover period shall be from December 29, 1999 to January 3, 2000.

B. Banking Hours during Contingency Period

To assure the public that there will be enough cash anytime to meet withdrawals, BSP will remain open during the holidays to service withdrawals of banks. To service the withdrawals of banks, key departments and offices of BSP in the head office and its 18 regional branches and 27 regional clearing centers shall observe the following banking hours during the contingency period:

All Saturdays except December 25 - 9:00 AM to 2:00 PM December 30, 1999 - 9:00 AM to 2.00 PM December 3 1, 1999 - 9:00 AM to 12:00 Noon January 1, 2000 - 10:00 AM to 2:00 PM

Banks' Head Offices and selected branches are encouraged to open in order to service deposit withdrawals on the above dates.

C. Procedures for Cash Transactions Among ATM Networks During the Crossover Period

All members of ATM networks are enjoined to refrain from adopting any measure that will adversely affect the normal deposit and withdrawal transactions of other banks. particularly during the crossover period.

D. Cash Transactions During the Crossover Period

The BSP Cash Department and regional cash centers shall service only cash withdrawals during the Saturdays and holidays of the contingency period.

E. Value Date of Loan Availments and Cash Transactions During the Crossover Period

Loan availments from the BSP credit windows and cash withdrawals during the crossover period shall be valued on the date of the transactions. No back valuing shall be permitted for these transactions.

F. Check Clearing Operations

Normal funds availability period shall be assured throughout the contingency period.

Alternate Clearing Centers for Metro Manila and Manila Outward Clearing — In case of non-availability of computer operations of member banks or the Philippine Clearing House Corporation, clearing participants shall access the alternate clearing sites at the BSP 3rd Floor Cafetorium and the Makati Sports Club. The contingency procedures issued by PCHC shall be adopted.

Alternate Clearing Procedures for BSP Regional Clearing Centers — In case of failure of computer operations of any clearing participant, the settling clerks shall be encouraged to come one hour before the scheduled clearing time to prepare its clearing statement using BSP's back up computers. Should the telecommunication facility of a bank fail, its settling clerks shall present the diskette containing the bank's items brought for clearing.

Returned COCI Clearing on December 30, 1999 — Only the AM Returned COCI Clearing shall be conducted on December 30, 1999 for value December 29, 1999.

G. Electronic Fund Transfer Instructions (EFTIS) for Customs Duties and Internal Revenue Taxes

To off load the crossover period, all remittances of customs duties and internal revenue taxes earlier collected and due to be credited to the General Fund of the Bureau of Treasury during the crossover period shall be transmitted to the BSP on December 29, 1999. The remittances shall be debited to the demand deposit of the banks on their original due dates.

In case of failure of any bank to access the EFTIS facility, a printed copy of the "Authority to Debit" shall be used as an alternate mode of conveying the fund transfer instruction.

H. Interbank Call Loan Transactions (IBCL) MIPS

Should there be a failure of any bank to participate in the on line operations of IBCL — MIPS and in case the server at the PCHC is not available, the forms shown in Annex A shall be used and contingency procedures in Annex B shall be activated.

IBCL trading on December 30, 1999 — An abbreviated IBCL trading shall be conducted on December 30 for value December 29, 1999. BSP shall settle the matched transactions at 12:00 Noon after recognizing the results of the AM Returned COCI clearing of PCHC and BSP regional clearing centers.

The first IBCL trading of 2000 shall be held on January 4 for value January 3.

I. BSP Command Centers — The dedicated telephone and fax numbers of the command centers are shown in Annex C.

This Circular Letter shall take effect immediately.

ARMANDO L. SURATOS Officer-in-Charge