Transitory Guidelines on the Reporting of Certain Exposures in the Capital Adequacy Ratio (CAR) Reports

BanEKO SENTRAL NG PIUIPINAS OFFICE OF THE DEPUTY GOVERNOR FINANCIAT SUPERVISION SECTOR MEMORANDUM NO. M.2020.067 To All Covered Banks and Quasi'Banks Subject : Transitory Guidelines on the Reporting of Certain Exposures in the Capital Adequacy Ratio (CAR) Reports Pursuant to the amendments to the Risk-Based Capital Adequacy Frameworks for universal and commercial banks (U/KBs) and their subsidiary banks and quasi-banks, and stand-alone thrift banks (TBs), rural banks (RBs) and cooperative banks (Coop Banks) under Circular No. 1084 and Memorandum No. M-2020-034 both dated 28 April 2O2O, all covered banks and quasi-banks shall temporarily report in the CAR reports, the following: 1.. Peso-denominated loans, to the extent guaranteed by the Agricultural Guarantee Fund Pool (AGFP) and Agricultural Credit Policy Council (ACPC) shall be afforded a zero percent (0%) risk weight, and shall be temporarily reported in the same manner as a guaranteed exposure of the Trade and Investment Development Corporation of the Philippines (TIDCORP).1 2. For the duration of the regulatory relief under Memorandum No. M-2020-034, current exposures to micro-, small and medium enterprises (MSMEs), both qualified and unqualified portfolio, shall be temporarily reported, as follows: FROM TO Basel 1,5 CAR Report for Stand-alone TBs, RBs and Coop Banks Qualified MSME loan portfolio reported in Current MSME loans, both qualified and Item D.(1) of Part lll.1. Risk Weighted On- unqualified portfolio to be reported in ltem Balance Sheet Assets with 75 percent risk C.(2) of Part lll.1.. Risk Weighted On-Balance weight Sheet Assets with 50 percent risk weight Basel lll CAR Report for U/KBs and their Subsidiary Banks and Quasi-banks Qualified MSME loans reported in ltem Current MSME loans, both qualified and 1.2.a.5.i of Part lll.1. Risk Weighted On- unqualified portfolio to be reported in ltem Balance Sheet Assets under 75 nercent risk l.2.a.5.iii of Part lll.1. Risk Weighted On- weight column Balance Sheet Assets under 50 percent risk weight column Unqualified MSME loans reported in ltem l.2.a.5.iii of Part lll.1. Risk Weighted On- Balance Sheet Assets under 100 percent risk weight column 'This is renamed as Philippine Guarantee Corporation (Philguarantee) A. Mabini St., Malate 1004 Manila, Philippines * (632) 8708-7701.* www.bsp.gov.ph* [email protected]

The foregoing transitory reporting shall be reflected in the Basel 1.5 and Basel lll CAR reports starting with the reference cut-off date as of end-September 2020. For guidance. .r 77 HUCHIG. FONACIER 04 September 2020 Page2 of 2