Updated Validation Rules of the BSP for Financial Reporting Package Related Reports

BANOKO SENTNAL NC PILIPINAS OFFICE OF THE DEPUW GOVERNOR SUPERVISION AND EXAMINATION SECTOR crRcutAR LETTER NO. Ct-2018{08 To : ALL BANKS Subject : Updated Validation Rules of the BSP for Financial Reporting Package Related Reports In an effort to further assist banks in finalizing the Financial Reporting Package (FRP) Related Reports, attached are changes to the validation rules provided under Circular Letter No. CL-20L7-060 dated 02 October 2017 which are used by the BSP to determine whether the entries in the reports are either balanced and reconciled or cited with mathematical defects requiring correction and the submission of amendments that are subject to penalty in accordance with existing regulations. Same validation rules emanate from the existing Reconciliation Report electronically transmitted by the BSP to banks immediately after the submitted report has been processed and validated. The changes include the following updated validation rules used to reconcile the FRP against the following related reports: 1) Basel lll CapitalAdequacy Ratio Report' 2l Risk Based CapitalAdequacy Ratio Report2 3) Report on Cross-Border Financial Positions 4l Expanded Report on Real Estate Exposure 5) Published Balance Sheet 6) Report of Selected Branch Accounts (Branch Report) 7l Report on Compliance with Mandatory Agri-Agra Credit under R.A. 10000 (Agri-Agra Report) 8) Report on Repurchase Agreement Additional validation rules will be issued through a Circular Letter (CL) as future enhancements to the reports are prescribed and/or as new formulations are introduced. As validation rules are updated and issued, a lead time of one (1) reporting cycle after the issuance of the corresponding CL shall be observed before penalties for non-adherence to the updated rules can be assessed and imposed on banks. The validation rules under CL-2017-060 that are not part of the changes identified in this CL continue to be in effect. The complete set of the updated validation rules can be downloaded from http://www.bsp.gov.ph/SES/reporting-templates. Banks may use the aforementioned rules and formulations as reference for internally developing and A. Mobini Sl., Moloie I004 Monilo, Philippines . (632l 708-7701 o www.bsp.gov.ph . [email protected]

reinforcing their own validation procedures, systems and controls. Such rules and formulations, however, mainly focus in determining arithmetical consistency of the FRP-related reports within an acceptable tolerance limit and are not intended to capture errors arising from significant changes or movements in values reported from one period to another nor misclassification of transactions arising from the misuse of the report accounts. The integrity and quality of the prudential reports prescribed for submission to BSP ultimately rests with the bank. Adequate internal controls should be in place to ensure that the information submitted by banks to BSP is consistent, correct and conforms to the prescribed reporting standards. CHI G. FONACIER eputy Governor { Janu"ty 2Ot8 Att: a/s 1/ For Universal Banks and Commercial Banks and their subsidiary banks and quasi-banks in accordance with Memorandum No. M-20U-038 dated 28 December 2017. 2/ For stand-alone Thrift Banks and Rural Banks in accordance with Memorandum No. M-2017-039 dated 28 December 2017.

Annex B.a Basel lll CAR FRP lnter Validation Rules Page 1 of8 Risk Based Capital Adcquacy Retlo Rlpo.t BASET lll FCDU/ Foraitn Regular Foroitn Offices Typc of RIN ParticulaE Pcs EFCDU Total Schedule No. I nstructions Accounts Pc$ Pes Pe$ Amount In USS In USS In USS Rul€/Remerks Fduiv Eouiv lsL3 11 :or Domestic Banks and Subsidiaries of Foreign Banks (v) Others Balance Sheet 32090000000000000( x Rule only applies to Oomestic Banks and 1.0/UNB Subsidiaries ot Foreign Eank Part ll 320900@(x)o000(n01 t5L3 - 12 :or Domestic Eanks and Subsidiaries of Foreign Banks - Minority Ealance Sheet 325150000000000@( x Rule only applies to Domestic Banks and 3.0/FA[_ nterest in subsidiary banks which are less than wholly-owned Subsidiaries of Foreign Eanks Part ll 32515050000000@0( \mount in CAR should be less than or eoual + 32515100000000000( to FRP rst3 - 23 :or Philippine Branch of a Foreign Eank (v) Others Ealance Sheet 320900000000000(n( x Rule only applies to Philippine Eranch of 1.0/uNB Foreicn Banks Part ll 3209000@0000@00: x tst3 - 47 .. Real and Other Properties Acquired Balance Sheet 19550100000000000( Amount in CAR should be greater than or 3.0/FA[. + 1501500fi)0fi)m0o0( eoual to FRP Pan lll.l 19550r00000000000( x Use Column 1 lSL3 - 155 Deleted |sL3 - 175 tems held for safekeepin&/custodianship 38 4953o(Xx)(xxx)10000( x 1.0/uNB 495300000@0200@( 49522000000010000( 49522000000020000( Part lll.2 49526000000000000( Use Notional Princioal Amount Column lSL3 - 177 Deleted tsL3 - 197 :or Domestic Banks and Subsidiaries of Foreign Banks - Other Balance Sheet 32020000000000000( x Rule only applies to Domestic Banks and 1.0/uN8 :omprehensive Income (iii) Remeasurements of Net Defined Benefit Subsidiaries of Foreign Eanks .iability/(Asset) Part ll 32020000000000000r rst_3 - 198 :or Philippine Branch of a Foreign Bank - Other Comprehensive Income Balance Sheet 3202000000(x)00000( Rule only applies to Philippine Branch of 1.0/uNB iii) Remeasurements of Net Defined Benefit Liability/(Asset) Foreign Banks Part ll 32020000000000000i x Type of Reconciliation Rule 1. Straightforuardrules 2. Formula Senerated rules 2.1. Same account with several COLUMNS 2.2. Combination of several accounts 3. Conditional rules

Annex B.b CAR FRP lnter Validation Rules Page 2 of 8 Rlviscd Risl Eased Capital Adequacy Ratio Report tor Stand Alone Thrift Banks, Rural Sanks and Cop€ratln Banks Foreitn R€gular Forcign Offfc.s Type ol Pcs €FCDU Total RIN Perticula6 s€h.dul€ No, Account CoddFomulation Instructions Accounts Pas P!s PcF Amount In U59 ln uss In UsS Rulc/Rcmarts FdtrIu Fduiv -AR7EO total Notional Princioal Amount 3a 4UWUUWUUUUWUU - x FRP value is Sreater than or equal to CAR 3.0/FArL 435000000000100000 - value 435000000000200000 OFF RWA Type of Reconciliation Rule 1. Straightforuardrules 2. Formula generated rules 2.1. Same account with several COLUMNS 2.2. Combination of several accounts 3. Conditional rules

B.d RCBP FRP lnter Validation Rules Annex Rcport on Cros-Border Fin.ncial Posltions for UniwEucommerclal Banls end their Subcidlary Thrift Banks Pes Foreign Regular FCDU / EFCDU Forcitn Ottices Typc of Total RIN Panlculars Schedule No. Account Cod€/Fomulatlon PCso Peso P€so Instructions Reconclllatlon Accounts In UsS In US' In US$ Amount Eduie Edulv Rule/R.nark5 lcBP30 )ue From Other Banks 2 10520000OO0O230OO0 + x :onvert amount in "Peso Accounts" to USS 2.l/UN8 105200000000290000 Jse "Demand", "Savings Deposit", "NOW" and 'Time Certificates of )eDosit" columns RCBP-Total 105200000000000000 x RCBP240 )ueto Other Eanks 23 200500O10(n20O@0 i x x x x :onvert amount in "Peso Accounts" to USS 1.0/UNB 200500005m200000 RCBP-Total Typ€ of Reconciliation Rule 1. Straightforuardrules 2. Formula generated rules 2.1. Same account with several COLUMNS 2.2. Combination of several accounts 3. Conditional rules

Annex B.e FRP lnter Validation Rules REE Erpanded Rcport on R.al €state EIposuB tor UnircRl Banks, Commerciel B:nks and Thrift aanks TypG of Rftonciliatior Rtil Pa.tlculars Schedule No. Ac6unt Cod€/Formulation Amount Instructlons Rul./Remarks REE93O \ddl Into - Secured by REM on residential properties (Amount in the FRF 11G 140150012810600001 Amount in the FRP is greater than or equal to 3.O/FArL s greater than or equal to REES) - Past Due REE5. USE Past Due COLUMT\ S1-BP-REts 14015001900565000( USE Past Due COLUMN Type of Reconciliation Rule 1. Straightfoeardrules 2. Formula generated rules 2.1. Same account with several COLUMNS 2.2. Combination of several accounts 3. Conditional rules

Annex B.g PBS FRP lnter Validation Rules Page 5 of 8 Publlshcd Balance Sheet fo. all Bank3 wlth R€sourc€s ol Pl Billlon and rborc Type ot RIN Pa.tlcula6 Schedulc No. Account Code/Formulatlon Entered Amount FRP Computcd Amount Instructions Reconci llation Rulc/Rcm.rks ,8S370 )ther Liabilities Balance Sheet 230600000000000000 + x z.tlvN6 230650O0O000q)00O0 + 230700000000000000 + 230750000000000000 + 230800000000000000 + 230780000000000000 soLo/coNso x r8s610 . Net NPLS 10, 11a. 12 140100018512600000 - :or Sched 10. USE Total Amortized Cost COLUMN less Total Allowance for credit 2.2/uNB 140100O18512600000 + osses COLUMN; For Sched 11A, USE Sum of Non-Performing, net of ITL and lTl- 140150018s126@000 - :OLUMNS: For sched 12 USE Total COLUMN 140150019000600000 + 140200018512600q)0 - 140200019012600000 soro x Type of Reconciliation Rule 1. Straightforuardrules 2. Formula Benerated rules 2.1. Same account with several COLUMNS 2.2. Combination of several accounts 3. Conditional rules

Annex B.k Branch FRP lnter Validation Rules Page 6 of 8 Report of Sebctcd Bnnch Accounts for .ll Sanks FCDU/ Type of Peio ;@itnRe&Lr FX Olficat Tolll RIN Prrtlcula6 Schrdule ilo. Account Cod./Formulatlon EFCDU I nstructlons Reondllatlon Amount PG$ EqulY Pcs Equlv Pce Equlv Rulc/Rcmarts la20 :urrent (Total) schedule 1la USE Current COLUMN 1.0/uN8 AtR x ]830 ast Due (Totall Schedule 11a x USE Past Oue COLUMN 1.0/uNB ALR x Type of Reconciliation Rule l. Straightforuardrules 2. Formulageneratedrules 2.1. Same account with several COLUMNS 2.2. Combination of several acco!nG 3. Conditional rules

Annex B.m Agri-Agra FRP Inter Validation Rules Page 7 of 8 Report on ComDliance with the Mandatory Atrarian Rcform and AaricultuEl Credit undrr RA No. loom for all Banks Forct8n FCDU/ ln o'fflcet Type of Account code/ Peg Totel RIN P.rtlola6 sch.dul€ No. Pcso Prso P€s Instrudions Reonciliallon Fomulation Accounts In U59 In UsS In U5$ Amount Fduiv Fdulu Rulc/Remarks \GR110 )thers Schedule 24 220100001595r00o(x x x ADD Peso Accounts and Peso Equivalent of Foreign Regular COLUMN5 z. r/ UNE 220100q)151210000( Main ReDort A 22010000159510000( x USE Amount on Date of ReDort COLUMN \GR240 )ue to Head Office/Branches/Agencies Abroad Schedule 20 230850000000000000 ADO Peso Accounts and Peso Equivalent of Foreign Regular COLUMNS 2.l/UNB 2308s000000s000000 23085000001000000( Main Reoort A 23085000000000000( x USE Amount on Date of Reoort COI-UMN \GR340 )ther Comorehensive Income b.4. Others Balance Sheet 32o9ooqx)ooofiX)oo( x ADD Peso Accounts and Peso Equivalent of Foreign Regular COLUMNS 2.I/UNB + 320200O0O00O0O00O( + 32025000000000000( Main ReDort A 32090000000000000{ x USE Amount on Date of Reoort COLUMN \GR35O )ue From Head Office/Branches/Agencies Abroad Schedule 20 155250000000000000 x ADO Peso Accounts and Peso Equivalent of Foreign Regular COLUMNS 2.1/UN8 155250000005000000 15525000001000000( Main Report A 155250000000ffxno( USE Amount on Date of Reoort COLUMN Type of Reconciliation Rule 1. StraightfoMardrlles 2. Formula generated rules 2.1. Sam€ account with several COI-UMNS 2.2, Combination of several accounts 3. Conditional rules

Annex B.n Repo FRP lnter Validation Rules Page 8 of 8 Report on Repurchasc Agie€ment Typr of RIN Pa.ticular Schldulc No. Account Code/Formulation Total Anount FRP Computed Amount Instructions Reconciliation Rule/R.marks tEPOIO :nd of Month Balance FRP Schedule 24 tzutlruz5uSl|ru+ 1.0/UNB 1201000O2s10100000 + r20100002510200000 IEPO Schedule I x lEP020 )utstanding Balance as of end of reporting month FRP Schedule 24 120100002505100000 + 1.0/uN8 120100002510100000 + t20100002510200000 REPO Schedule 2 x Type of Reconciliation Rule 1. Straightforuardrules 2. Formula generated rules 2.1. Same account with several COLUMNS 2.2. Combination of several accounts 3. Conditional rules