Monitoring of the account Deferred Income Tax

CIRCULAR LETTER Series of 2002

TO: ALL COMMERCIAL AND THRIFT BANKS

To enhance the monitoring of the account Deferred Income Tax and to properly define its source, the following sub-accounts are created:

Deferred Income Tax – Timing Differences Deferred Income Tax – Net Operating Loss Carry-Over (NOLCO) Deferred Income Tax – Minimum Corporate Income Tax (MCIT)

Moreover, additional sub-accounts for Restructured Loans and Development Incentive Loans are also created to eliminate variances resulting from cross – verification of balances reflected in the quarterly Report on the Utilization of Loanable Funds Generated Which were Set Aside for Agrarian Reform Credit and Other Agricultural Credit as against the monthly Consolidated Statement of Condition as follows:

Restructured Agrarian Reform/Other Agricultural Credit Loans Restructured Development Incentive Loans Past Due Restructured Agrarian Reform Loans/Other Agricultural Credit Loans Past Due Restructured Development Incentive Loans Items in Litigation — Restructured Agrarian Reform/Other Agricultural Credit Loans Items in Litigation — Restructured Development Incentive Loans

The Additional Information Schedule (SCHAD.DBF for KBs and XXXSCHAD.DBF for TBs), as attached, is further amended to effect the above changes. All Commercial and Thrift Banks are required to submit the amended schedule starting September 2002 report.

For compliance.

ALBERTO V. REYES Deputy Governor