The Establishment of Two Separate Rediscounting Windows

Bangko Sentral ng PiliPinaS

OFFICE OF THE GOVERNOR

CIRCULAR N0. 806 Series of 2013

Subject: The Establishment of Two Separate Rediscounting Windows

September 2011, 13 December 2012 and 1 August 2013, respectively, establishing two separate rediscounting windows, Rediscounting Window I (RW I) for universal and commercial banks and Rediscounting Window II (RW II) for thrift, rural and cooperative banks, the following provisions of Section X269 and Subsections X268.2 X268.3, X269.2, X269.5, X269.6 and X269.10 of the Manual of Regulations for Banks, covering the guidelines of the Bangko Sentral ng Pilipinas Rediscounting Facility, are hereby amended as follows: Pursuant to Monetary Board Resolution Nos. 1373, 2063.A and 1267 dated 9

Submit their application in the prescribed form (RL Form No. 1) to the following documents: S X268.2 Application Procedures. Banks applying for a rediscounting line shalf Department of Loans and Credit (DLC), BSP-Manila, together with the

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S X268.3 Approval/Renewal of the Line. The approval/renewal of following requirements: rediscounting line shall be subject to the bank's full compliance with the

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Banks with approved rediscounting line shall, thereafter, submit the following:

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b. For new applicant rural/cooperative banks with designated custodian bank, a tripartite depository agreement (RL Form No. 2) by and among the applicant bank, designated depository bank (duly concurred by its Head Office} and the DLC.

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Electronic Rediscounting System Participation Agreement before availing of the rediscounting facility of the BSP. Sec. X269. Rediscounting Availments. Banks shall enroll in the Electronic Rediscounting System (eRS) by executing and submitting to the DLC a notarized

A. Mabini St., Malate 1004 Manila, Philippines * (632) 7087701 * www.bsp.gov.ph * [email protected]

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S X269.2 Eligible Papers and Collaterals. The BSP shall accept credit instruments covering all economic activities except the following:

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by: Credit instruments acquired under commercial credits shall be secured either

Type of Collateral Collateral Value XXX 6 Marketable debt instruments issued by the NG and al its Current market value shall equal or exceed the outstanding balance of

bonds or ROPs of the Philippines US$ denominated instrumentalities, including Republic the PN

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Credit instruments acquired under other credits shall be secured by:

Type of Collateral Collateral Value XXX (5) Marketable debt instruments issued Current market value shall equal or

by the NG and al Its exceed the outstanding balance of instrumentalities, including Republic of the Philippines US$ denominated the PN

bonds or ROPs

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Unsecured loans may be accepted for rediscounting provided they are:

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b. Loans secured by a duly registered mortgage on real property of the

bank, seventy percent (70%) of the appraised value of which equals or exceeds the outstanding balance of the unsecured PN and other

issued by the NG and all its instrumentalities, including Republic of the collaterals acceptable to the BSP, e.g., marketable debt instruments

Philippines US$ denominated bonds or ROPs.

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S X269.5 Maturities. The maturities of BSP rediscounts are as follows:

a. (1) Export Packing (2) Trading (3) Transport Commercial Credits Type of Credit rediscount but shall not go 180days beyond the maturity date of the credit instrument RW 1 from date of Maturity Date rediscount but shall not go 180 days from date of beyond the maturity date of the credit instrument RW I

(5) Export Bills (EBs) (4) Quedan At Sight Usance EB of purchase shipment date Fifteen (15) days from date Term of draft but not to exceed sixty (60) days from Fifteen (15) days from date Term of draft but not to exceed sixty (60) days from of purchase shipment date b.Production Credits C Other Credits credit). exceed 180 days. the depending on the type of 180 days from rediscount but shall not go beyond the maturity date of the PN. Renewabie, not to 180 days from beyond the maturity date of rediscount but shall not go P (renewable date date of of 360 days credit). rediscount but shall not go the PN rediscount but shall not go beyond the maturity date of depending on the type of 360 days from date of beyond the maturity date of the PN from date of (renewable

rediscount rates for peso, dollar and yen loans shall be as follows: 5 X269.6 Rediscount/Lending Rates and Liquidated Damages. The

a. Peso Rediscounts

RWI RW iI Interest Rate BSP one (1)-month repurchase (R/P) BSP overnight reverse

90 days 180 days 30 days BSP one (1)-month R/P rate + 0.0625 BSP one (1)-month R/P rate + 0.1250 BSP one (1)-month R/P rate rate plus term premium: 1 BSP O/N RRP rate + 0.0625 BSP O/N RRP rate plus term premium: repurchase (O/N RRP) rate

360 days n/a BSP O/N RRP rate + 0.1250

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$ X269.10 Monitoring and Credit Examination of Borrowing Banks. The DLC shall conduct an off-site analysis of the BSP's credit exposure to borrowing banks and a risk-based on-site credit examination that will focus primarily on determining whether there is a "high", "moderate" or "low" probability of default on the settlement of the banks' rediscounting obligations with the BSP.

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Effectivity. This Circular shall take effect on 15 NOV 2013 From the effectivity of this Circular, thrift banks are given a sunset period of five years

given 10 years (i.e. until1_ 5 November 2023). By1 5November 2023, all banks shall (i.e. untfi 5November 2018) to access RW II, while rural and cooperative banks are

access ony RW .

FOR THE MONETARY BOARD:

NESTOR A. ESENILLA, JR A28es Officer-n-Charge (

{S August 2013

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