Alternative Mode of Compliance with the Mandatory Credit Allocation for Agriculture and Agrarian Reform

BANOKo SeNrnaL NG PILIPINAS OFFICE OF THE GOVERNOR MEMORANDUM NO. M.2020.086 To : All Private Banks Subject : Alternative Mode of Compliance with the Mandatory Credit Allocation for Agriculture and Agrarian Reform The Monetary Board, in its Resolution No. 1534 dated 26 November 2020, approved the temporary inclusion of housing loans as an alternative mode of compliance with the mandatory credit allocation for agriculture and agrarian reform under Republic Act No. 10000, for the purpose of implementing the provisions of Section 4(ccc) of Republic Act (R.A.) No. LL494 or the Bayanihan to Recover As One (BARO) Act. Private banks are encouraged to reallocate any unutilized loanable funds to housing loans. In this respect, housing loans granted starting from 15 September 2020 until 31 December 2O2O may be used as an alternative mode of compliance with the twenty-five percent (25%) total mandatory credit allocation for agriculture and agrarian reform. Banks may utilize eligible housing loans as alternative compliance either for the ten percent (Ll%l mandatory agrarian reform credit allocation and/or for the fifteen percent (Ls%l mandatory other agricultural credit allocation, as provided under Republic Act No. 10000 and Section 331 of the Manual of Regulations for Banks (MORB). For this purpose, housing loans shall include all loans granted to individuals, fully secured by first mortgage on residential property that is or will be occupied by the borrower as well as housing microfinance loans as provided under Section 314 of the MORB. The use of housing loans as allowable alternative mode of compliance with the mandatory credit allocation for agriculture and agrarian reform credit shall be reflected as an adjustment to the amounts reported as compliance by private banks with the said mandatory credit for the quarters ending 30 September 2020 and 31 December 2020. Housing loans, that meet the criteria provided under this Memorandum, shall be valued at amortized cost, gross of allowance for credit losses, and added to the total amount reported as compliance. Banks concerned shall submit a one-time supplemental report (Annex A) on the use of the housing loans as compliance with the mandatory credit allocation for agriculture and agrarian reform for the said periods on or before 22 lanuary 2O2L. Consistent with its supervisory enforcement policy, the Bangko Sentral reserves the right to deploy its range of supervisory tools to promote adherence to the foregoing rules and bring about timely corrective actions and compliance with Bangko Sentral regulations. In this regard, the Bangko Sentral may issue directives to, or impose sanctions on, the bank and/or responsible persons of the bank such as directors, officers and/or employees. For guidance and implementation. BENJAMIN E. DIOKNO Governor O] Decem ber 2O2O A. MabiniSt., Malate 1004 Manila, Philippines. (632) 8708-7701 . www.bsp.gov.ph. [email protected]

Annex A Deadl ine : 22 )anvary 2O2L Submisslon: Original copy to Departnent of Supervi sory Ana I yti cs (DSA) Nrnr ofBrnk Addres ST'PPIEMENTAL AGRI AGRA REPORT Ar of thr pe riodr indicrt.d Amount rr of Amount er of 30 Septrmber 2020 31 Drcrmbrr 2020 A. Totrl Loneble Fundl Ge nerrttd 8. Mnimum Amount Rrouirrd to be Allocetrd ior: 1. 10% AGRA i.e. Agrarian Reform Credit (10% x ltem A) 2. 15% AGRI i.e. Other Agricultural credit (15% x ltenr A) C. C,omplincl with AGRA 1. Direct Compliance 2. Al ternative Compl i ance 3. Excess Compliance ofa BanVBanks Used by Anotha ernL/nrhs q.^L.1/ 4. Excess Comoliance with AGRA Lrtilized for AGRI" . Total Compliance with AGRA (C1 + C2 - C3 - C4) . Housing loans used as alternative compliance with AGRA3/ 7. Adjurt.d Totd Complimcr with AGRA (C5 + C6) Percentate of Compliance with the Agricultural Reform Gedit D, Complhncr with AGRI 1. Direct Compliance 2. Alternati ve Compl i ance 3. Excess Comoliance with AGRA l.rtilized for AGRIa/ 4. Excess Compliance ofa BanVBanks Used by Another aral,/ntha qo.L.1/ 5. Total Compliance wi*r AGRI {D1 + D2 + D3 - D4) . Housinc loans used as alternative compliance with AGR|3/ 7. Adjurtrd Totrl Complilrcr with AGRI (D5 + D6) 8. Perc entace of Comol iance with the Other Aeri c ul tural Credi t E. Excrrr/(Drficirncvl with 10% AGRA (C.7 - 8.1) F. Exc$r/(Drftcicncvl with 15% AGRI (D.7 - 82) Foot note 9: t'Fo, a parent ba nk tvith me.iority-owned subsidrary bank/s reporting compliance on a group-wide basis. ;'Excess compliance with 1O% agra credit rvhich has been utili2ed as compliance rv,th the L5% agricultura I credit, Amountg reported shoutd a lways be negative. lPerta ins lo housr ng loan5 granted fiom 15 September 20 20 u ntil 3 1 Oecember 202 0, pursua nt to 8SP Memora ndum M-2 02 0-- 'ExcesscompliancewithlO%agracreditwhichhesbeenulilizedascompliancewiththel5%agrrculturalcredit.Atnountsreponed should alrvays be posilive. I hereby certify that all mafters set forth in this Supplemental Agri Agra Report are true and correct to the best of my knowledge and belief. Authori zed Signatory