Further Amendment of Section 2 of CB Circular No. 1389, as Amended

CIRCULAR NO. 138 Series of 1997

SUBJECT : Further Amendment of Section 2 of CB Circular No. 1389, as Amended

Pursuant to Monetary Board Resolution No. 995 dated July 30, 1997, Section 2 of Central Bank Circular No. 1389, as amended, is further to read as follows:

"Section 2. Sales of Foreign Exchange by AABs. — AABs may sell foreign exchange to residents (including the Government, its political subdivisions/instrumentalities and government-owned and controlled corporations), for any non-trade purpose, without need of prior Bangko Sentral ng Pilipinas (BSP) approval, provided that:

a) for sales of foreign exchange exceeding US$25,000.00, the AAB shall require a written notarized application and supporting documents from the purchaser of the foreign exchange; and

b) for sales of foreign exchange not exceeding US$25,000.00, the AAB shall require a written application only.

The written application required under b) shall be in accordance with the attached format.

AABs shall see to it that this limit on the safe of foreign exchange for a non-trade purpose is not breached by the splitting of a foreign exchange purchase into smaller amounts so as to make it appear that the purchase does not violate the prescribed limit.

There is deemed to be a splitting of a foreign exchange purchase within the prohibition of this Circular if a Bank sells foreign exchange for a non-trade purpose to any one purchaser, within a fifteen banking day period, in such individual amounts which, when combined, exceed $25,000.00.

The AAB shall report all sales covered by this section under FED I using the appropriate transaction codes.

For sales of foreign exchange for payment of obligations that are foreign loan- or foreign investment-related, the AAB shall require purchaser's presentation of proof of BSP approval and/or registration for each loan or investment, whenever required by existing rules."

This Circular shall take effect immediately.

For the Monetary Board:

GABRIEL C. SINGSON Governor