To implement the Subsidiary Ledger (SL) Reporting System as prescribed under item 4 of Circular 270 dated December 19, 2000, as amended

MEMORANDUM Series of 2004

TO:  ALL THRIFT BANKS

To implement the Subsidiary Ledger (SL) Reporting System as prescribed under item 4 of Circular 270 dated December 19, 2000, as amended by Circular Letter dated July 9, 2002, all thrift banks shall comply with the following guidelines:

1. Implementation of the Subsidiary Ledger (SL) Reporting shall be in two phases

a. Phase 1

This phase shall include the following changes/adjustments:

1. Revisions in the existing SLs by including data elements appearing in the different Schedules of the monthly Consolidated Statement of Condition not disclosed in the original SL;

2. Updates in the SLs’ data structures based on these revisions;

3. Adoption on a group-wide basis of the level of data elements for Due from Other Banks, Head Offices/Branches and Agencies, Deposit Liabilities and Other Liabilities;

4. Integration of the existing Interbank Loans/Accounts Receivable Ledger’s (IBLAR) data structure with the Loan Ledger’s data structure;

5. Inclusion of the CREDEX report in the SL Reporting System; and

6. Retention of the existing format of Schedule 2F (Schedule of FCDU Other Assets and Other Liabilities From/To Non-Residents)

b. Phase 2

This phase shall cover the inclusion of new data elements as a result of changes in policy/regulations issued by BSP after Circular 270. A separate memorandum  shall  be issued prior to the Implementation of this phase.

2. The parallel testing of the Subsidiary Ledger (Si) Reporting System shall be carried out on a staggered basis, effective for reports as of February 29, 2004 for the initial ledger (Due From Other Banks/Head Offices Branches and Agencies) and which shall be transmitted to Bangko Sentral ng Pilinas (BSP) fifteen  (15) banking days after end xof reference month. Each subsidiary ledger shall undergo two months parallel testing and eventually go on live implementation after the two months parallel run. Parallel testing of subsequent ledgers shall follow with an interval of one month for each Iedger, as scheduled below :

REPORT PARALLEL TESTING (covering reports as of) LIVE IMPLEMENTATION (covering reports as of)

Due from other Banks/Head Office, Branch and Agencies  February 2004  April 2004

Other Liabilities Ledger  March 2004  May 2004

Deposit Liabilties/Due to Local Banks Ledger  April 2004   June 2004

Bills Payable Ledger  May 2004  July 2004

Contingent Accounts Ledger  June 2004  August 2004

Equity Investment Ledger  July 2004  September 2004

Investment Ledger  August 2004  October 2004

Loan Ledger  September 2004  November 2004

3. All thrift banks shall transmit the SL reports to SRSO using either the E-mail addresses [email protected] or [email protected] . Non-participation during the parellel test and transmission of erroneous SL reports during the live-run shall be subject to penalties for erroneous reporting.

4. SRSO shall run an official validation test on reports submitted. Banks shall be promptly advised on the validation results and shall be required to correct reports when necessary.

5. As a subsidiary ledger is fully implemented, the bank shall discontinue transmitting to the Supervisory Reports and Studies Office (SRSO) the pertinent Consolidated Statement of Condition (CSOC) schedules. Attached is the list of subsidiary ledgers and the related CSOC schedules (Annex 1). Similarly, other related independent reports such as the CREDEX shalt also be discontinued when the Loan Ledger is fully implemented.

6. Attached as Annex 2 are the revised data structures of the SLs for your ready reference.

For strict compliance.

NESTOR A. ESPENILLA, JR. Sector-in-Charge