Collection of the Annual Supervisory Fees (ASF) for the Year 2016

EIANoKo SeNrnIL No PILIPINAs OFFICE OF THE DEPUTY GOVERNOR SUPERVISION AN D EXAMINATION SECTOR MEMORANDUM NO. M-2015-!01 TO : AIL BANKS AND NON-BANKS W|TH eUAS|-BANK|NG (NBQBs} FUNCTIONS Subject : €ollection of the Annual supervisory Fees (ASF) for the year 201G Pursuant to Section x901.1 (2008 - x508.1) and 4g01.1Q (200g Manual of Regulations for Banks (MORB) and the Manual of Regulations - 4652q of the for Non-Bank Financial Institutions (MORBNFI), respectively, the following guidelines shall govern the computation and collection by the Bangko Sentral Ng Pilipinas (BSp) and the payment by Banks and NBQBs ofthe 2016 ASF. 1. Computation of ASF for 201G The ASF is based on the Average Assessable Assets (Anay of the preceding year multiplied by the applicable assessment rates approved by the Monetary Board as follows: Type of Financial Institution Applicable Rate Universal/Commercial Banks L/28 of 7% Thrift Banks t/28 of I% Rural/Cooperative Ban ks t/40 of t% NBQes L/28 of L% The AAA of the preceding year is derived from the reportsl submitted by the bank/NBQB to the BSP in compliance with the standards and requirements prescribed under existing regulations. In case of a merger or consolidation, the assets of the covered institutions prior to the merger or consolidation as well as the assets of the newly formed institution shall be considered in determining the AAA. t FRP for banks, CSOC for NBQBs, and FRPTI for banks and NBeBs with Trust functions

The collection of the 2oL6 AsF shall take into consideration events subsequent to the collection of the 2015 ASF, particularly for submitted amendments to the prescribed reports used in deriving the AAA that would warrant a recomputation of the 2015 ASF. In such cases, the resulting over- or under-payment of the 2015 ASF shall be deducted/added to the 2016 A;F. Sample computations to illustrate potential permutations of the above described scenarios are provided in Annex A. 2. Notification of Amount Due for 2016 and Mode of payment The BSP Supervisory Data Center (SDC) shall send a billing notice in March 20L5 to the Bank/NBeg for its ASF payment indicating, among others, the computation of the ASF due, including the 2% creditabte withholding tax (CWT) thereon, if applicable, the period covered by the ASF and the specifi. O.t" when the ASF will be debited from the Bank,s/NBeB,s Demand Deposit Account (DDA) with the BSP. The BSp will not accept checks as mode of ASF payment. Banks/NBeBs, upon receipt of the ASF billing notice from the BSP, should maintain adequate balance in their DDA to cover the ASF and other daily obligations and, when necessary, make corresponding deposits to fully cover said obligations. In case of deficiency, the provisions on DDA deficiency in sections xg01 (200g and 4901.1e (2008 - 4652e of the MORB and MORNBFT, respectivery, - x60g.1) as amended, shallapply. 3. Exceptions Noted on Billing Notice of 2016 ASF Upon receipt of the BSP Notice of ASF billing, a Bank/NBeB is encouraged to check the accuracy of the billing and to submit any of the noted exceptions therein not later than ten (10) days before the specified date of collection/debit to DDA as indicated in the billing notice. The said exceptions, together with supporting documents, shall be submitted to: The Director Supervisory Data Center (SDC) Bangko Sentral Ng pilipinas 1lth Floor, Multi-storey Building BSP Complex, A. Mabini Street Malate, Manila 1004 Any exceptions received after the cut-off date or any exceptions not dury substantiated with documents before the cut-off date will be evaluated and considered in the computation of the ASF for the immediately succeeding year.

4. Withholding Tax on 2015 Supervisory Fees The following shall apply to Banks/NBQBs covered by Sections M and N of Bureau of rnternal Revenue (BrR) Revenue Regulations (R.R.) No. 2_9g, as amended by R.R. No. 17-2003, and R.R. No. 2_2OO6: 4.L within seven (7) days from date of this Memorandum, the concerned Bank/NBQB shall submit a written representation to BSp, (at the address indicated in Section 3 hereof), on whether or not it is included among the institutions covered under Sections M or N of R'R. No. 2-98, as amended. lf available, a certified true copy of the BrR Notice classifying it under section M of R.R. No. 2_9g, as amended, shall be attached to the written representation. The submission of the written representation or BIR Notice shall no longer be necessary if previously transmitted and received by the BSp in connection with previous ASF assessments. 4'2 The ASF, net of the 2% CWT, shalt be debited from their respective DDAs on the specified date referred to in the notice of ASF billing under Section 2 above. 4.3 Three (3) original signed copies of BIR Form No. 2307 Certificate of Creditable Tax Withheld at Source, which exclusively pertain to the withholding on ASF shall be submitted to the SDC at the address provided in section 3 above on or before 31 July 2016. The BtR Form No. z3o7 shail accuratery indicate, among others, the following details: 4.3.1 Payee: Bangko Sentral ng pilipinas 4.3.2 Taxldentification Number: OOO-354_790_O0O 4.3.3 Address: A. Mabini St. corner p. Ocampo Sr. St., Malate, Manila 4.3.4 Zip Code: LOOA 4.3.5 The BtR-registered name of the payor-bank/_NBeB, as exactly indicated in the BIR certificate of Registration (BtR Form No. 2303) of the Bank/NBQB. 4.3.6 the amount of income payment pertaining to the gross ASF 4.3.7 the tax withheld 4.3.8 the period of tax return. Furthermore, the BIR Form No. 2307 - certificate of creditable Tax withheld at source covering the withholding on ASF should not include other transactions with BSp and should pertain exclusively to the ASF. lf the concerned Banks/NBegs have other transactions with 8sP, a separate BIR Form 23e7 for the transaction/s shall be provided to BSP.

4.4 In case of failure of concerned Bank/NBQB to submit the duly accomplished forms within the deadline stated above or if such forms contain errors and discrepancies that would render the BIR Form No. 2307 invalid for claiming tax credits, the BSP shall be constrained to immediately debit an amount equivalent to the 2% CWT from the DDA of Banks/NBQBs concerned, with no obligation on the part of the BSP to reimburse said amount. ln case of DDA deficiency, the provisions in sections X901.1 (2009-x608.1) and 4901q.1 (2008_ 4652Q of the MORB and MoRNBFI, resp'ectively, as amended, shall applv. This Memorandum shall take effect immediately. For strict compliance. I /!t.J-RJ' ilESTOR A. TFPEN|L|A, Deputy Governor t4 February 2016

Annex A S""n"rior for.o.put"tion of 2016 Annu.l Sup"ruirorv F"e (ASFI 1' consolidation: Two or more entities combine to form a new singte entity. The original entities cease operations after the new entiw starts its operatlon Scenario A - RB A and TB B consolidated in Feb 2016 to form a new TB C. The assessment of the 2016 ASF is on March 2016 Since the consolidation was prior to the assessment for 2015 AsF, the A/AA of the two banks in 2015 will be combined and the TB rate will be applied 2015 FRP Asset Balances RBA I reB I rBc Jan Lil,658,792.OO Feb 153,861,844.80 Mar 21,928,504.00 16s,311,225.60 Apr 153,352155.20 May !54,307,374.40 Jun 22,295,742.75 168,488,963.20 Jul t70,373,352.O0 Aug t7o,279,229.80 sep 22,320,467.O5 L68,700,[email protected] Oct 168,t86,770.40 Nov 177,7LO,888.80 Dec 22,383,6/.8.40 192,866,280.80 Sum ofAssets 88,927,76L60 2,018,095,640.00 No. of reporting periods 4 L2 Average Assessable Assets 22,231,940.40 169,t74,636,67 L90,4O6,577.07 ASF rate forTB g/28 of t%) 0.000357143 ASF for 2016 for TB C 68,002.35 scenario B - RB x and TB y consolidated in November 2015 to form a new TB z. The 2015 AUAA of RB X as reported in its FRP for 3 quarters will be combined with the 2015 Ar'Vq of TB y and the 2015 AAA of TB Z and the TB rate will be applied 2015 FRP Asset Balances RBX I rsy I rBz Jan t74,949,966.5O Feb t74,103,2L0.1O Mar 20,638,592.A0 775,il3,177.2A Apr 762,94.L,977.40 May 163,945,2IO.3O Jun 20,983,663.20 t79,Otg,s23.40 Jul 181,021,586.50 Aug 180,920,518.10 sep 21,007,498.40 179,244,561.75 Oct 178,698,443.55 Nov 199,705,941.95 Dec 2L9,676,536.L5 Sum ofAssets 62,629,753.60 I,750,498,374.80 419,382,478.t0 No. of reporting periods 3 1C 2 Average Assessable Assets 20,876,584.53 175,M8,837.48 209,691,239.05 405,616,661.06 ASF rate forTB (1128 of t%) 0.0003s7143 ASF for 2076forTBZ 7M,863.09

2. Merger: One entity absorbs another entity and continue to operate as the surviving entity while the absorbed entlty ceases to operate Scenario C - RB D and TB E merged in February 2016 with TB E as the surviving entity The 2015 AAA of RB D as reported in its FRP for 4 quarters will be combined with the 2015 MA of TB E and the TB rate will be applied 2015 FRP Asset Balances RBD I reE I Total Jan : L54,367,677-50 Feb . L53,620,479.50 Mar 23,2L8,4t5.0O L54,979,274.O0 Apr t43,772,333.OO May 144,557,538.50 Jun 23,606,621.t0 157,958,403.00 Jul L59,725,Ot7.5O Aug 159,635,839.50 sep 23,633,435.70 158,156,966.25 Oct L57,675,097.25 Nov L73,M2,606.98 Dec 23,700,333.60 187,318,015.53 Sum ofAssets 94,158,806.40 1,905,309,188.51 No. of reporting periods A L2 Average Assessable Assets 23,539,70r.60 t58,775,765.7L L82,3t5,467.3L ASF rate forrB (1.128 of 1%l 0.000357143 ASF for 2016 for TB E 65,1t2.67 Scenario D - RB V and TB W merged in November 2015 with TB W as the surviving entity The 2015 tuAA of RB V as reported in its FRP for 3 quarters will be combined with the 2015 AAA of TB W and the TB rate will be applied 2015 FRP Asset Balances RBVlrewlrot"t Jan L85,24t,L4L.00 Feb L8r'.,344,575.40 Mar 24,5O8,328.00 185,975,128.80 Apr t72,526,799.60 May 173,589,046.20 Jun 24,918,100.05 189,550,083.60 i Lgt,67O,O2L.OO Jul Aug ':. 191,563,007.40 sep 24,.946,404.35 189,788,359.50 Oct 2t4,734,763.8s Nov 236,208,240.24 Dec 255,104,899.45 Sum ofAssets 74,372,832.40 2,370,296,066.04 No. of reporting periods 3 L2 Average Assessable Assets 24,79O,944.L3 !97,524,672.t7 222,3t5,6L6.3O ASF rate forTB(1/28of l%l 0.000357143 ASF for 2016 for TB W 79,398.43 Note: In cases where the RB is the new or surviving entity, the rate for the RB will be applied in determining the 2016 ASF.

3. Amendment of reports used in the computation of ASF Scenario E - RB E amended lts Dec 2014 FRp in Feb 2016 The 2015 ASF will be recomputed and the resulting under/(over) collection will be added/(deducted) from the 2016 ASF Computation of 2016 ASF *Recomputation of 2075 ASF RB E 2015 FRP RB E 2074 FRP Asset Balances Asset Balances Qriginal Amended t9,8@,g4.go 78,522,549.05 78,522,549.05 Jun 20,196,775.83 79,605,793.75 79,605,793.75 sep 20,219,7t7.21 20,644,777.95 20,644,777.95 Dec 952.08 27,484,407.05 27.883.458.27 of Assets 80,257,520.20 80,656,577.42 Sum ofAssets 80,558,089.92 No. of reporting periods 44 No. of reporting periods Average Assesso ble Assets 20,064,390.05 20,764,742.85 Average Assessable Assets 20,L39,522.48 rate for RB F/ O of 1%) 0.00425 ASF rate for RB (1/40 of 1%) 0.00025 Recomputed ASF for 2075 5,047.04 ASF for 2016 5,034.88 collected for 2A75 4,727.04 Under/(Over) Collection of 2015 ASF* 320.00 U nder/(Over) Collection 320.00 bJal ASF for 2016 5,3s4.88