BSP Circular Letter dated March 31, 1999

CIRCULAR LETTER Series of 2000

Subject:  BSP Circular Letter dated March 31, 1999

Please be informed that the Monetary Board, in its Resolution No. 437 dated March 17, 2000,  decided as follows:

a.   to allow Philippine branches of foreign banks to exclude the Foreign Currency Deposit Unit (FCDU) portion of “net due to” utilized as capital in the computation of the foreign bank branch’s capital which will form part of the loanable funds for Agri-Agra purposes, using the actual ratio of FCDU “net due to” to total “net due to” (Regular Banking Unit and FCDU) as basis for the amount to be deducted from total capital accounts.  (Attached as Annex “A” is the sample computation);

b.   to  clarify footnote no. 6 of the main report of the Consolidated Report on Utilization of Loanable Funds Generated Which Were Set Aside for Agrarian Reform  Credit/Other Agricultural Credit (BSP 7-16-27) that the provision  for liquidity deducted from the computation of the loanable funds generated for purposes of compliance with the agri- agra requirements shall exclude FCDU deposits and FCDU demand liabilities; and

c.    to reclassify the quarterly Consolidated Report on Utilization of Loanable  Funds Generated Which Were Set Aside for Agrarian Reform Credit/Other Agricultural Credit (BSP 7-16-27) from a Category B to a Category A-3 report.

Accordingly, the following footnotes of the main report of the Consolidated Report  on  the Utilization of Loanable  Funds  Generated  Which  Were  Set Aside  for  Agrarian  Report  Credit/Other  Agricultural  Credit   (BSP 7-16-27) shall be amended to read as follows:

a.       Footnote no. 5

“For  Philippine   branches   of   foreign   banks,    this   refers  to Assigned        Capital and  Net  Due  to Head Office/Branches/Agencies   Abroad   but    not  to   exceed  four  (4)  times  the  amount of Assigned Capital; three (3) times in the case of branches of foreign banks with EKB license.  The Foreign Currency Deposit Unit (FCDU) portion of said “net due to”  which amount shall be computed using the actual ratio of FCDU “net due to” to “total net due to” (Regular Banking Unit and FCDU) as basis for computing said FCDU portion shall be deducted from total capital accounts.”

b.       Footnote no. 6

“Excluding FCDU accounts.  Demand Liabilities refers to all liabilities  that are due and demandable within 30 days from date of  report.”

The reclassification of the Consolidated Report on Utilization of Loanable Funds Generated  Which Were Set Aside for Agrarian Reform Credit/Other Agricultural Credit (BSP 7-16-27) from a Category B to a Category A-3 report shall take effect with the March 31, 2000 report.  All other provisions of this Circular Letter shall take effect immediately.

RAFAEL B. BUENAVENTURA Governor