To achieve an effective risk management of FX positions

CIRCULAR LETTER Series of 1999

TO : All Commercial Banks and Thrift Banks with FCDU Licenses

Pursuant to Monetary Board Resolution No. 1691 dated November 26, 1999 and to achieve an effective risk management of FX positions, all commercial banks and thrift banks with FCDU licenses are required to:

1. Use separate subsidiary ledgers per currency for foreign currency transactions, which ledgers shall henceforth be called as "Multi-Currency Subsidiary Ledger" (MCSL). The MCSL shall contain at the very least, the information set forth in the attached sample. Such MCSL shall henceforth be the sole source of figures reported in Schedule 13 (FX Position Report) and Schedule 14 (Consolidated FX Assets and Liabilities).

2. Reckoned from the date of receipt of the Circular-Letter, submit for review, validation and acceptance by respective operating Departments (i.e., DCB I, DCB II or DTBNBFI) the following:

MCSL format to be submitted within fifteen (15) banking days; and

Foreign currency monitoring and accounting system for review, validation and acceptance by the BSP within three (3) months.

FOR THE MONETARY BOARD:

RAFAEL B. BUENAVENTURA Governor