Issuance of Certificate of Eligibility (COE) under the Special Purpose Vehicle (SPV) Act of 2002

MEMORANDUM NO. M-2008-014

To :        ALL BANKS AND NON-BANK FINANCIAL INSTITUTIONS PERFORMING QUASI-BANKING FUNCTIONS (NBQBs)

Subject :  Issuance of Certificate of Eligibility (COE) under the Special Purpose Vehicle (SPV) Act of 2002

Relative to the 2nd phase implementation of the “Special Purpose Vehicle (SPV) Act”  (R.A. No. 9182, as amended by R.A. No. 9343), please be reminded that the following transactions enumerated as items 1 to 6 of Section 15 of the Implementing Rules and Regulations (IRR) of said Law shall be entitled to the tax exemptions and fee privileges under the same Section only if such transactions occur not later than14 May 2008:

The transfer of the non-performing loans (NPL) by the financial institution (FI) to an SPV;

The transfer of the real and other properties acquired (ROPA) by the FI to an SPV;

The dacion in payment (dacion en pago) of the NPL by the borrower to the FI;

The dacion in payment (dacion en pago) of the NPL by a third party, on behalf of the borrower, to the FI;

The transfer of the NPL (secured by a real estate mortgage on a residential unit) by the FI to an individual; and

The transfer of the ROPA (single family residential unit) by the FI to an individual.

In this connection, the Monetary Board, in its Resolution No. 246 dated 28 February 2008, authorized the Supervision and Examination Sector to accept applications for Certificate of Eligibility (COE) until 13 June  2008, or up to 30 days after the 14 May 2008 deadline.   For the purpose of determining whether a transaction occurred within the 14 May 2008 deadline, relevant documents to support the application (e.g., Asset Sale and Purchase Agreement, Deed of Assignment, Deed of Dacion, among others) should be notarized not later than 14 May 2008.

For your guidance.

NESTOR A. ESPENILLA, JR. Deputy Governor