Collection of the Annual Supervisory Fees (ASF) for the Year 2018

BANoKo SenrnaL No Pn-tplNAs OFFICE OF THE DEPUW GOVERNOR SUPERVISION AND EXAMINATION SECTOR MEMORANDUM NO. M-2018. O1.O TO : ALL BANKS AND NON-BANKS WITH qUASI.BANKING FUNCTIONS (NBQBsl Subject : Collection of the Annual Supervisory Fees (ASF) for the Year 2018 Pursuant to Subsections X901.1 (2008 - X608.1) and 4901Q.1 (2008 - 4652Q) of the Manual of Regulations for Banks (MORB) and the Manual of Regulations for Non-Bank Financial Institutions (MORBNFI), respectively, the following guidelines shall govern the computation and collection by the Bangko sentral Ng Pilipinas (BSP)and the payment by Banks and NBQBs of the 2018 AsF. 1. Computation of ASF for 2018 The ASF is based on the Average Assessable Assets (AAA) of the preceding year multiplied by the applicable assessment rates approved by the Monetary Board as follows: Type of Financial lnstitution Applicable Rate U niversal/Commercial Banks t/28 of L% Thrift Banks L/28 of Lo/o Rura l/Cooperative Banks L/4O of L% NBQBs Ll28 of 1% The AAA of the preceding year is derived from the reportsl submitted by the bank/NBQB to the BSP in compliance with the standards and requirements prescribed under existing regulations. In case of a merger or consolidation, the assets of the covered institutions prior to the merger or consolidation as well as the assets of the newly formed institution shall be considered in determining the AAA. In case of upgrading or downgrading, the assets from one bank category to another shall likewise be considered in determining the AAA. 1 Financial Reporting Package (FRP) for banks, Consolidated Statement of Condition (CSOC) for NBeBs, and FRP for Trust Institution (FRPTI) for banks and NBeBs with Trust functions

The collection of the 2018 ASF shall take into consideration events subsequent to the collection of the 2017 ASF that would warrant a recomputation. In such cases, the resulting over or under-payment of the 2OL7 ASF shall be deducted/added to the 2018 ASF. Sample computations to illustrate potential scenarios are provided in Annex A. 2. Notification of Amount Due for 2018 and Mode of payment The BSP Supervisory Data Center (SDC) shall send a billing notice in March 2018 to the Bank/NBQB for its ASF payment indicating, among others, the computation of the ASF due, including the z% creditable withholding tax (cwr) thereon, if applicable, the period covered by the ASF and the specific date when the AsF will be debited from the Bank's/NBQB's Demand Deposit Account (DDA)with the BSp. The BSP will not accept checks as mode of ASF payment. Banks/NBQBs, upon receipt of the ASF billing notice from the BSp, should maintain adequate balance in their DDA to cover the ASF and other daily obligations and, when necessary, make corresponding deposits to fully cover said obligations. In case of deficiency, the provisions on DDA deficiency in Subsections X901.1 (2008 - X608.1) and 4901e.1 (2008 - 4652Q) of the MORB and MORNBFI, respectively, as amended, shall apply. 3. Exceptions Noted on Billing Notice of 2018 ASF Upon receipt of the BSp Notice of ASF billing, a Bank/NBeB is encouraged to check the accuracy of the billing and to submit any of the noted exceptions therein not later than ten (10) days before the specified date of collection/debit to DDA as indicated in the billing notice. The sald exceptions, together with supporting documents, shall be submitted to: The Senior Director Supervisory Data Center (SDC) Bangko Sentral Ng pilipinas 11th Floor, Multi-Storey Building BSP Complex, A. Mabinistreet, Malate 1004 Manila Any exceptions received after the cut-off date or any exceptions not duly substantiated with documents before the cut-off date will be evaluated and considered in the computation of the ASF for the immediately succeeding year.

4. Withholding Tax on 201E Supervisory Fees The following shall apply to Banks/NBQBs covered by Sections M and N of Bureau of Internal Revenue (BlR) Revenue Regulations (R.R.) No. 2- 98, as amended by R.R. No. 17-2003, and R.R. No. 2-2006: 4.L Within seven (7) days from date of this Memorandum, the concerned Bank/NBQB shall submit a written representation to BSP, (at the address indicated in Section 3 hereof), on whether or not it is included among the institutions covered under Sections M or N of R.R. No. 2-99, as amended. lf available, a certified true copy of the BIR Notice classifying it under Section M of R.R. No. 2-9g, as amended, shall be attached to the written representation. The submission of the written representation or BIR Notice shall no longer be necessary if previously transmitted and received by the BSP in connection with previous ASF assessments. 4.2 The ASF, net of the 2% CWT, shall be debited from their respective DDAs on the specified date referred to in the notice of ASF billing under Section 2 above. 4.3 Three (3) original signed copies of BIR Form No. 2307 certificate of creditable Tax withheld at source, which exclusively pertain to the withholding on ASF shall be submitted to the sDC at the address provided in section 3 above on or before 31 July 201g. The BIR Form No. 2307 shall accurately indicate, among others, the following details: 4.3.t Payee: Bangko Sentral ng pilipinas 4.3.2 Tax ldentification Number: OOO_354_790_OOO 4.3.3 Address: A. MabiniSt. corner p. Ocampo Sr. St., Malate, Manila 4.3.4 Zip Code: 1004 4.3.5 The BIR-registered name of the payor_bank/_wgeB, as exactly indicated in the BIR Certificate of Registration (BtR Form No.2303)of the Bank/NBeB. 4.3.6 the amount of income payment pertaining to the gross ASF 4.3.7 the tax withheld 4.3.8 the period of tax return.

Furthermore, the BIR Form No. 2307 - Certificate of Creditable Tax Withheld at Source covering the withholding on ASF should not include other transactions with BSP and should pertain exclusively to the ASF. lf the concerned Banks/NBQBs have other transactions with BSp, a separate BIR Form 2307 for the transaction/s shall be provided to BSp. 4.4 ln case of failure of concerned Bank/NBeB to submit the duly accomplished forms within the deadline stated above or if such forms contain errors and discrepancies that would render the BIR Form No. 2307 invalid for claiming tax credits, the BSP shall be constrained to immediately debit an amount equivalent to the 2% CWT from the DDA of Banks/NBeBs concerned, with no obligation on the part of the BSp to reimburse said amount. ln case of DDA deficiency, the provisions in Subsections X90j..1 (2008-X608.1) and 4901e.1 (2008-4652Q) of the MORB and MORNBF|, respectively, as amended, shallapply. This Memorandum shalltake effect immediately. For strict compliance. ESTTTUTO C. CRU a7 February2Ot}

Annex A Scenarios for computation of 2018 Annual Supervisorv Fee (ASF) L. Upgrade/Downgrade from one bank category to another Scenario A: RB A upgraded toTB A in lanuary 2078 Scenario B: TB B downgroded to RB B in lanuarv 2078 The 2017 Average Assessable Assets (AAA) of RB A The 2017 AAA of TB B will be multiplied by the will be multiplied by the TB rate. RB rate. 2017 Net Assessable Assets Jan 242,849,367.L4 Feb Feb 242,337,276.23 Mar 24L,288,139.49 Mar 241,288,L39.49 Apr Apr 240,666,674.79 May May 241,300,200.39 Jun 240,8L3,284.40 Jun 240,813,284.40 Jul Jul 238,639,584.15 Aug Aug 236,534,588.97 sep 236,63L,077.94 sep 236,631,077.94 Oct Oct 232,860,322.ss Nov Nov 229,900,793.89 Dec 229,155,336.56 Dec 229,155,335.55 Sum of Net Assessable Assets 947,887,838.39 Sum of Net Assessable Assets 2,852,976,646.50 No.of reporting periods 4 No.of reporting periods t2 Average Assessable Assets 235,971,9s9.60 Average Assessable Assets 237,748,053.88 ASF rate forTBlLl2Sof L%l 0.0003s7143 ASF rate for RB (1/40 of 1%) 0.00025 ASF for 2018 for TB A 84,532.88 ASF for 2018 for RB B 59.437.01 Page 1 of8

Scenorio C: RB A upgraded toTB A in November 2077 TB A will be charged the applicable rate for the equivalent number of months as RBfiB in 2Ot7. The difference in the amount collected as 2Ot7 ASF will be added as an adjustment to the 2018 ASF. 2017 ASF Computation of 2018 ASF (Bosed on 2076 Net Assessoble Assets) ASF octuol Recomputotion collection for 2077 2017 NetAssessable AsRBA AsRBA AsTBA Totol Assets Jon Feb Jan Mor 241,288,139.49 Feb Apr Mar 232,860,323 Moy Apr Jun 240,813,284.40 May Jul lun 238,639,584 Aug Jul sep 236,631,077.94 Oct 242,337,275 Nov Dec 229,755,336.56 Nov 254,991,835 Sum of Net Assessoble Assets 947,887,838.39 947,887,838.39 947,887,838.39 267,741,427 Avero ge Assessa ble Assets 2i6,977,959.60 236,977,959.60 236,977,959.60 No.of reporting periods 4 10 2 of Net Assessable Assets 7,236,570,445.70 Proroted No. of months os RB/TB 10/12 2/12 of reporting periods 5 P roroted Ave ro g e Asse s so ble Assets 197,476,6ji.00 39,495,326.60 Assessable Assets 247,374,089.L4 Applicoble ASF Rotes 0.0002s0 0.0002s 0.000357143 rate for TB (L/28 of t%l 0.000357143 ASF octuol collection for 2077 s9,242.99 for 2018 88,326.50 2017 ASF Recomputotion (RB A + TB A) 49,359.16 14,105.48 63,474.54 /(Over) Collection of 2017 ASF* 1.65 Less: ASF octuol collection for 2017 59,242.99 otal AsF for 2018 92,558.14 Under/(Over) Collection of 2017 ASF* 4,237.55 2%CV'IT 1,851.16 Net ASF for 2018 for TB A 90,705.98

Scenario D: TB A downgroded to RB A in November 2017 RB A will be charged the applicable rate for the equivalent number of months as TB/RB in 20L7. The difference for the amount collected as 201-7 ASF will be added as an adjustment to the 2018 ASF. Computation of 2018 ASF 2017 ASF (Bosed on 2076 Net Assessoble Assets) ASF octuol collection for Recomputotion 2077 2017 Net Assessable AsTBA AsTBA AsRBA Total Assets Jon 242,849,367.14 233,739,443 Feb 242,337,276.23 238,4r3,212 241,288,139.49 Mar 243,L8I,476 Apr 240,666,674.79 Apr 248,O45,L06 May 241,300,200.39 May 253,006,008 Jun 240,8li,284.40 lun 258,056,128 Jul 238,639,584.75 263,227,457 Aug 235,s34,588.97 268,492,000 5ep 236,631,077.94 273,86L,840 Oct 232,860,322.55 279,339,077 Nov 229,900,79i.89 Dec 229,1ss,336.56 910,715 Sum of Net Assessoble Assets 2,852,976,646.50 2,852,976,646.50 2,952,976,646.50 Avero ge Assesso ble Assets 237,748,05i.88 2i7,748,053.99 237,748,053.99 Sum of Net Assessable Assets 2,756,281,455.45 No.of re porti ng pe riods 72 102 No. of reporting periods 11 Proroted No. of months os TB/RB 10/12 2/12 Assessable Assets 25L,480,732.3L Proroted Averoge Assessoble Assets 198,123,378.23 39,624,675.65 rate for RB $/a0 of 7%) 0.0002s Applicoble ASF Rotes 0.0003s7143 0.000357143 0.0002s for 2Ot8 62,870.03 2017 ASF Recomputation (TB A + RB A) 70,758.38 9,906.77 80,664.55 Under/(Over) Collection of 2017 ASF* 14,245.5L) Less: ASF octuol collection for 2077 84,910.05 84,910.05 Total ASF for 2018 58,524.53 Under/(Over) Collection of 2017 ASF* (4,24s.s11 2%CWT 7,772.49 Net ASF for 2018 RB A 57,452.04

2. Consolidation: Two or more entities combine to form a new single entity. The original entities cease operations after the new entity started its operations. Scenario E: RB C ond TB C consolidated in tanuary 2018 to form a new TB D. Since the consolidation was effected prior to the assessment for 2018 ASF, the 2017 Net Assessable Assets of the two banks will be combined and the TB rate will be applied. 2017 Net Assessable Assets lltl RBC I TEC I TBD Jan 164,658,792.00 164,658,792.0O Feb 163,861,844.80 163,861,844.80 Mar 21,928,504.O0 765,371,225.60 787,239,729.60 Apr 153,357,155.20 153,357,155.20 May I54,30L,374.40 154,30L,374.40 Jun 22,295,142.15 168,488,963.20 190,784,105.35 Jul t70,373,352.OO 770,373,3s2.00 Aug 170,278,228.80 170,278,228.80 sep 22,320,467.05 168,700,764.00 197,O27,237.05 Oct 168,L86,770.40 168,786,770.40 Nov 177,7r0,888.80 177,770,888.80 Dec 22,383,648.40 192,866,280.80 215,249,929.20 Sum of Net Assessable Assets 2,LO7,023,401.60 No. of reporting periods L2 Average Assessable Assets 775,58s,283.47 AsF rate for TB (t/28 of t%) 0.000357143 ASF for 2018 for TB D 62,709.05

Scenario F: RB X and TB Y consolidated in November 2077 to form a new TB Z. TB Z will be charged the applicable rate as TB in 2017. The difference in the amount collected as 2OL7 ASF will be added as an adjustment to the 2018 ASF. Computation of 2018 ASF 2017 Net Assessable Assets 2017 ASF (Bosed on 2076 Net Assessoble Assets) RBXlraylrBz ASF octual collection for 2077 RBX TBY Totol Jan 174,949,966.50 L74,949,966.50 Jon 137,285,764.53 137,286,164.53 Feb L75,643,r77.20 L75,643,777.20 Feb 740,087,922.99 140,087,922.99 Mar 20,638,592.00 775,643,L77.20 L96,28L,769.20 Mor 19,0i6,380.13 142,946,860.19 161,983,240.32 Apr 762,941,977.40 t62,947,977.40 Apr 745,864,143.05 145,854,743.05 May 163,945,210.30 163,945,210.30 Moy 748,840,962.30 148,840,962.30 Jun 20,983,653.20 L79,O79,523.40 200,003,186.60 lun 19,424,877.69 757,878,532.96 177,303,410.64 Jul 181,021,686.50 181,021,686.50 lul 154,978,094.86 154,978,094.86 Aug 180,920,618.10 180,920,618.10 Aug 758,740,913.72 758,740,913.12 sep 2t,o07,498.40 r79,244,567.75 200,2s2,060.15 sep 19,827,303.76 161,368,278.69 787,789,582.45 Oct t78,698,443.55 778,698,M3.55 Oct 164,661,508.87 764,657,508.87 Nov 199,705,941.95 Nov 168,021,947.83 168,021,947.83 Dec 2r9,676,536.15 Dec 20,225,820.16 771,450,967.77 197,676,787.33 Sum of Net Assessable Assets 2,234,O40,573.6Q Sum of Net Assessob/e Assets 78,508,381.73 1,845,526,296.55 7,924,034,678.29 No. of reporting periods 72 Averog e Assesso ble Assets 79,627,095.43 153,793,858.05 760,336,223.79 Average Assessable Assets 786,L70,047.80 No.of reporting periods 4 12 12 ASF rate for TB (I/28 of t%l 0.000357143 Applicable ASF Rotes 0.0002s0 0.000357743 0.000357143 ASF for 2018 for TB Z 66,489.33 ASF octual collection for 2017 57,262.96 Under/(Over) Collection of 2017 ASF* (2,s70.2r]l 2017 ASF Recomputotion (RB A + TB A) 4,906.77 54,926.40 59,833.17 Total AsF for 2018 63,9r9.t2 Under/(Over) Collection of 2077 ASF* (2,s70.21) 2%CWT 1,278.38 Net ASF for 2018 for TB Z 62,640.73

3. Merger: One entity absorbs another entity and continue to operate as the surviving entity while the absorbed entity ceases to operate Scenario G: RB D and TB E merged in Jonuarv 2078 with TB E as the suruiving entity The quarterly 2077 Net Assessable Assets of RB D will be combined with the monthly 2017 Net Assesable Assets of TB E and the TB rate will be applied. 2017 Net Assessable Assets RBD I reE I Total Jan 154,367,617.50 154,367,677.50 Feb 153,620,479.50 r53,620,479.50 Mar 23,278,476.00 t54,979,274.OO 178,197,690.00 Apr 143,772,333.00 L43,772,333.OO May 1/14,657,538.50 144,657,538.50 Jun 23,606,621.70 157,958,403.00 181,55s,024.10 Jul 159,725,077.50 L59,725,017.50 Aug 159,635,839.50 1s9,635,839.s0 sep 23,633,435.70 158,156,956.25 181,790,401.95 Oct L57,675,097.25 L57,675,097.25 Nov L73,442,606.98 L73,442,606.98 Dec 23,700,333.60 187,318,015.53 211.018.349.13 Sum of Net Assessable Assets L,999,467,994.9r No. of reporting periods t2 Average Assessable Assets 166,622,332.97 ASF rate for rB $/28 of L%l 0.000357143 ASF for 2018 for TB E 59,508.00

Scenorio H: RB A and TB A merged in December 2077 with TB A os the surviving entity TB A will be charged the applicable rate as TB in 2OI7 . The difference for the amount collected as 2Ot7 ASF will be added as an adjustment to the 2018 ASF, Computation of 201 8 ASF 2017 ASF 2017 Net Assessable Ass( (Bosed on 2076 Net Assessoble Assets) TBA Total ASF Collected for 2017 Recomputotion RBA TBA TBA s49,972,808 549,972,808 lon 242,U9,367.14 242,49367.14 lJan Feb Feb 242,337,276.23 242,337,276.23 I lMar 252,O70,870.22 252,070,870 Mor 241,288,1i9.49 241,288,139.49 482,s76,278.98 Apr Apr 240,666,674.79 240,666,674.79 May Moy 241,300,200.39 241,300,200.39 JUn 277 ,277,957.24 277,277,;57 lun 240,813,2U.40 240,813,284.40 481,626,568.80 Jul tul 238,639,584.15 238,639,s84.1s Aug Aug 236,534,588.97 235,534,588.97 5ep 305,00s,7s2.96 sos,0os,7sg sep 236,631,077.94 236,631,077.94 473,262,155.88 Oct Oct 232,860,322.ss 232,860,322.55 Nov Nov 229,900,793.89 229,900,793.89 Dec 335,506,328.26 335.506.328 Dec 229,155,336.56 229,155,336.56 458.310.673.12 ,um of Net Assessoble Assets 947,887,838.39 2,367,790,003.13 3,8(n,864,44.89 Sum of Net Assessable Assets 1,169,860,908.67 549,972,807.74 t,7t9,833,7L6.42 4v e r o g e Ass es s a ble Assets 2i6,971,959.60 197,315,833.59 316,738,707.07 No. of reporting periods t2 \o.oJ reporting periods 412 72 Average Assessable Assets L43,3t9,476.37 Applicable ASF Rotes 0.0002s 0.0003s7143 0.000357143 ASF rate for TB (t/40 of I%l 0.000357143 2017 ASF 59,242.99 70,469.97 ASF for 2018 51,185.s3 lecomputed 2017 ASF (TB A) 173,120.97 Under/(Over) Collection of 2017 ASF* (15,s91.991 !ess: ASF collected for 2017 (RB A + TB A) 129,712.96 Total ASF for 2018 34,593.54 'Jnder/(Over) Collection of 2077 ASF* (16,591.99) 2%CWT 591.87 Net ASF for 2018 for TB A 33,901.66

4. Amendment of reports used in the computation of ASF Scenario l: RB E amended its Dec 2076 FRp in lonuarv 2OIg The 2017 ASF will be recomputed and the resulting under/(over) collection will be added to/deducted from the 2O1g ASF. Computation of 2018 ASF Recomputotion of 2077 ASF 2017 Net Assessable Assets 2076 Net Assessoble Asssets RBE RBE Originol Amended Jan Feb L9,864,644.80 Mar 18,522,548.05 78,522,548.05 Apr May lun 20,796,775.93 19,605,793.75 79,605,793.75 20,279,717.27 sep 20,644,771.95 20,644,777.95 Oct Oct Nov Dec 20,276,9s2.O8 Dec 27,484,407.05 21,883,458.27 of Net Assessoble Assets 80,257,520.20 80,656,577.42 Sum of Net Assessable Assets 80,558,089.92 of reporting periods 4 4 No. of reporting periods 4 Assessoble Assets 20,064,i80.0s 20,164,142.85 Assessable Assets 20,!39,522.49 rote for RB Q/a0 of 1%) 0.0002s rate for RB (7140 of t%l 0.0002s Recomputed ASF for 2017 5,041.04 for 2018 5,034.88 Less: ASF collected for 2017 016.10 ) Collection of 2017 ASF* 24.94 Under/(Over) Collection of 20t7 ASF* 24.94 Total AsF for 2078 5,059.92 2%CWT 101. Net ASF for 2018 for RB E 9s8.62