Amendments of certain provisions of BSP Circular No. 342 dated 08 August 2002

CIRCULAR NO. 366 Series of 2003

The Monetary Board, in its Resolutions No. 1603 and No. 4 dated 07 November 2002 and 03 January 2003, respectively, approved the amendment of certain provisions of BSP Circular No. 342 dated 08 August 2002 as follows –

1. Item a

FCDU/EFCDU may lend funds to RBU only after it has fully complied with the prescribed 100% asset cover/30% liquidity cover on FCDU/EFCDU liabilities.

2.  Item b.1

FCDU/EFCDU lending to RBU shall be –

1)   Capped at the lower of total outstanding balance on RBU’s on-balance sheet foreign currency trade assets [1] or 30% of the level of FCDU/EFCDU deposit liabilities, computed at the average daily balance (using 2-month rolling data) as of end of the second week prior to the reference week (refer to Annex “A” for sample computation). Total outstanding balance of FCDU/EFCDU lending to RBU shall, at all times, be within the prescribed cap. Any breach thereon shall be subject to the imposition of a monetary penalty of P30,000 per day, commencing on the day the cap was breached until the same is corrected.

3.  First paragraph of Item f

Banks shall submit to the appropriate BSP supervising department, within five (5) banking days from end of reference month, a certification under oath (prescribed format attached as Annex “B”), signed by the Bank’s President or Country Manager, in case of local branch/subsidiary of foreign banks, Compliance Officer and Head of Treasury, to the effect that, at any day of the reference month, the outstanding balance on funds borrowed from FCDU/EFCDU did not exceed the prescribed cap (i.e., lower of total outstanding balance on RBU’s on-balance sheet foreign currency trade assets or 30% of the level of FCDU/EFCDU deposit liabilities) and were utilized by RBU solely for foreign currency trade transactions.

This Circular shall take effect immediately.

[1]/ i.e., Customers’ Liability on Import Bills-Foreign, Customers’ Liability under Trust Receipts-Foreign, Customers’ Liability for this Bank’s Acceptances Outstanding-Foreign, Export Bills Purchased and Foreign Bills Purchased-Documentary, excluding past due accounts and Items in Litigation

FOR THE MONETARY BOARD:

RAFAEL B. BUENAVENTURA Governor