Amendments to the Manual of Regulations for Banks and Manual of Regulations for Non-Bank Financial Institutions as of 30 June 2016

EIANOKO SENTRAL No PILIPINAS OFFICE OF THE GOVERNOR CIRCULAR NO. 945 Series of 2OL7 Subject: Amendments to the Manual of Regulations for Banks and Manual of Regulations for Non-Bank Financial Institutions as of 30 June 2016 The Monetary Board, in its Resolution No. 120 dated 19 January 2OI7, approved the following amendments to the Manual of Regulations for Banks (MORB) and Manual of Regulations for Non-Bank Financial Institutions (MORNBFI) as of 30 June 2015. Section 1. Annex A of Appendix 89 (List of Areas Covered by the Regulotory Relief; lnclusive Dotes of Coverage; ond lmplementing Guidelines on the Restructuring Scheme) of the MORB and Appendix Q-67 [Regulatory Relief for Non-Bank Financiol lnstitutions with Quasi-Banking Functions (NBQBs) Affected by Calomitiesl of the MORNBFI are amended to add the grant of regulatory relief to covered areas affected by the "El Nino" phenomenon pursuant to Memorandum No. M-2016-006 dated 17 May 2016 (Annexes A and A-1). Section 2. ltem "m" of Subsection X326.L of the MORB is amended to correct the cross-reference of the definition of "Secured loan, borrowing or other credit accommodation" from ltem "k" to ltem "1" and shall read as follows: "Subsec. X326.1 Definitions. For purposes of these regulations, the following definitions shall apply: a. Directors x x x xxx k. Total loan portfolio x x x t. Secured loon, borrowing or other credit accommodation x x x m. lJnsecured loon, borrowing or other credit accommodotion shall refer to any loan, or other credit accommodation or portion thereof referred in Sec. X327 which is not secured in accordance with ltem "l" above." A. MabiniSt., Malate 1004 Manila, Philippines o (632) 708-77-01.www.bsp.gov.pho [email protected]

Section 3. ltem "c" of Subsection X361.4 of the MORB is amended to correct the cross-reference of "Credit Review Process" from "sec. x3o2" to "subsec. XL78.16" and shall read as follows: "Subsec. X361.4 Exemptions lrom rules on unsecured loons. x x x a. xxx xxx c. Loan Portfolio and Other Risk Assets Review System required under Subsec. X178.16 which would serve as: xxx" Section 4. ltem "b" of Subsection 4328Q.5 of the MORNBFI is amended to correct the cross-reference of prescribed ceilings from ltem "b" to ltem "o" and shall read as follows: "Subsec. 4328Q.5 (20084328Q) Loons, other credit occommodations and guorontees gronted to subsidiaries ond/or offiliates. a. Ceilings. xxx xxx b. Exclusions from the ceilings. Loans, other credit accommodations and guarantees secured by assets considered as non-risk under existing Bangko Sentral regulations as well as interbank call loans shall be excluded in determining compliance with the ceilings prescribed under Item "o" above. Procedurol requirements. x x x" FOR THE MONETARY BOARD: I ru- R,^:r v ftesron A. Es+NILLA, JR. Officer-ln-Charge fu february 20L7

lr i, ANNEX A App.89 Annex A IIST OF AREAS COVERED BY THE REGULATORY RELIEF; INCLUSIVE DATES OF COVERAGE; AND IMPIEMENTING GUIDELINES ON THE RESTRUCTURING SCHEME (Footnote to Secs. X257, X306, X338,Subsecs. X778.77, X792.2, X269.6 and X269,8) l. Areas that were Declared under State of Calamity: xxx EL NINO a) 2010 xxx xxx xxx b) 2016 Banks with head offices and/or branches located in areas which were affected by the El Nifio phenomenon: Provided, That a declaration of a state of calamity is issued by the National Disaster Risk Reduction Management Council or the local sanggunian, upon the recommendation of the Regional or Local Disaster Risk Reduction and Management Council. JUAN xxx LANDO XXX XXX XXX ll. lnclusive Dates of the Applicability of Temporary Relief to Banks Affected by Calamities For RBs/TBs/Coop Banks For all Rediscounting Banks Exclusion from GtL of only 1% Non- Non-imposition Moratorium Staggered 60-day grace computation for imposition of of penalties on on monthly booking of period to pay of past due restructured penalties for legal reserve payments due allowance for rediscounting loans ratio loans late deficiencies to the 8SP loan losses for obligations submission of from reserve until loans outstanding as supervisory week ended / outstandint as of reDorts to of XXX xxx XXX XXX xxx XXX xxx XXX Lando tO/tghsto t0/L8/Lsto L0/tShsto t0/22h5to 04/20/L6 rolLs/1s r0/18/t5 rol3]^/1s t0l3r/L6 04l30l16 04/2r/L6 El Niffo for a period of for a period of NA for a period of for a period of declaration date declaration date (2016) one (1) year one (1) year one (1) year one (1) year of a state of of a state of from from starting from from declaration calamity calamity declaration date declaration date reserve week date of a state of

ANNEX A of a state of of a state of following the calamity calamity calamity declaration date including those of a state of loans becoming calamity past due six (6) months after date of declaration lll. lmplementing Guidelines on the Restructuring Scheme Covering the Rediscounting Obligations with the Bangko Sentral of Rediscounting Banks in the Areas Affected by Natural Calamities xxx xxx xxx F. Other provisions a. xxx xxx xxx XXX XXX XXX b. Effectivity date The loan settlement scheme shall be made available, as follows: XXX XXX XXX x) Ineng- up to 29 February 2OL6; y) Lando - up to 30 April 2016; and z) El Niffo (2016) - up to 13 November 2OL6. Page2 ol 2

Annex A-1 App.q-ez REGUTATORY RELIEF FOR NBQBs AFFECTED BY CAIAMITIES (Footnote to Sr&sc, 4192Q,2 qd Sr;rs. Wad 4257Q) XXX For TBs/ RBs/Coop ganks/NBQBs a. During a temporary grace period for payment or upon their restructuring and subject to reporting to the Bangko Sentral, exclusion of the loans of borrowers in affected areas, which should have been reclassified as past due loans under Sec. 4306Qx x x;t xxx xxx xxx d. For all types of credits extended x x x; e. Non-imposition of monetary penalties r r r;t f. Allowing banks to provide financial assistance to their officers and employees who were affected by the calamity even if not within the scope of the existing Bangko Sentral-approved Fringe Benefit Program (FBP) subject to subsequent submission of request for approval of the amendment to FBP to the appropriate supervision and examination department for regularization2;and g. In the case of El Nifro (2OL6l, Moratorium without penalty on monthly payments due to the Bangko Sentral, for a period of one (1) year from declaration date of a state of calamity, for banks with ongoing rehabilitation; and For All Rediscounting Banks a. Upon application, granting of a 60-day grace period to settle the outstanding rediscounting obligations as of the dates specified in ltem "ll" of Annex A, with the Bangko Sentral of all rediscounting banks with head office, or with branches or with end-user borrowers in the affected areas except those with serious violations or findings with the SES;1 and b. In addition to above, x x x {", .ttl,..bl. to El Nifio (2015) 2ltem"f' also covers UBs/KBs affected by Luis, Mario, Ruby, Seniang and Lando

tlST OF AREAS COVERED BY THE REGULATORY RELIEF; INCIUSIVE DATES OF COVERAGE; AND IMPLEMENTING GUIDETINES ON THE RESTRUCTURING SCHEME ( F o otn ote to $tfuc. 4792Q2 and *6, 4W md 4257Q) L Areas that were Declared under State of Calamity: xxx xxx xxx LANDO XXX XXX XXX EL NtNO (2015) NBQBs with head offices and/or branches located in areas which were affected by the El Nifio phenomenon: Provided, That a declaration of a state of calamity is issued by the National Disaster Risk Reduction Management Council or the local sanggunian, upon the recommendation of the Regional or Local Disaster Risk Reduction and Management. ll. Inclusive Dates of the Applicability of Temporary Relief to Banks Affected by Calamities For RBsfiBs/Coop Banks For all Rediscounting Banks Exclusion from GIL of only 1% Non- Non- Moratorium Staggered 60-day grace computation of for imposition imposition of on monthly booking of period to pay past due loans restructured of penalties penalties on payments due allowance for rediscounting ratio loans for late legal reserve to the BSP loan losses for obligations submission deficiencies until loans outstanding as of from reserve outstanding as of supervisory week ended / of reDorts to XXX XXX XXX XXX XXX XXX XXX Lando LO/18/L5 to Lo/I8h5to 10/18/15 to 10/22/t5ro L0/18/rs Lo/t8/15 Lo/3rh6 r0/31/16 04/30/16 04/2L/L6 El Nifio for a period of for a period of NA for a period of for a period of declaration date declaration date (2016) one (1) year from one (1) year one (1) year one (1) year of a state of of a state of declaration date from starting from from declaration calamity calamity of a state of declaration date reserve week date of a state of calamity including of a state of following the calamity those loans calamity declaration date becoming past of a state of due six (6) calamity months after date of declaration

lll. lmplementing Guidelines on the Restructuring Scheme Covering the Rediscounting Obligations with the Bangko Sentral of Rediscounting Banks in the Areas Affected by Natural Calamities XXX XXX XXX F. Other provisions xxx xxx xxx b. Effectivity date The loan settlement scheme shall be made available, as follows: XXX XXX XXX d) Lando - up to 30 April 2016 e) El Nifio (2016)- up to 13 November 2016