Collection of the Annual Supervisory Fees (ASF) for the Year 2017

Barucxo SenrReL Ne PtulptNAs OFFICE OF THE DEPUW GOVERNOR SUPERVISION AND EXAMINATION SECTOR MEMORANDUM NO. M.2017. OO5 TO : ALL BANKS AND NON-BANKS WITH QUASI-BANKING (NBQBS) FUNcTloNs Subject : Collection of the Annual Supervisory Fees (ASFI for the Year 2017 Pursuant to Subsections X901.1 (2008 - X608.1) and 4901Q.1 (2008 - 4652Q) of the Manual of Regulations for Banks (MORB) and the Manual of Regulations for Non-Bank Financial lnstitutions (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 2017 ASF. 1. Computation of ASF for 2017 The ASF is based on the Average Assessable Assets (AAA) of the preceding year multiplied by the applicable assessment rates approved by the Monetary Board as follows: Type of Financial Institution Applicable Rate U niversal/Com mercial Ba nks L/28 of L%o Thrift Banks L/28 of L% Ru ral/Cooperative Ban ks L/40 of t% NBQBS 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. In case of upgrading or downgrading, the assets from one bank category to another shall likewise be considered in determining the AAA. t FRP for banks, CSOC for NBQBs, and FRPTI for banks and NBQBs with Trust functions

The collection of the 2OL7 ASF shall take into consideration events subsequent to the collection of the 2016 ASF, particularly for submitted amendments to the prescribed reports used in deriving the AAA that would warrant a recomputation of the 2016 ASF. In such cases, the resulting over or under-payment ofthe 2016 ASF shall be deducted/added to the 2017 ASF. Sample computations to illustrate potential permutations of the above described scenarios are provided in Annex A. 2. Notification of Amount Due for 2Ot7 and Mode of Payment The BSP Supervisory Data Center (SDC) shall send a billing notice in March 2OL7 to the Bank/NBQB for its ASF payment indicating, among others, the computation of the ASF due, including the 2o/o creditable withholding tax (CWT) thereon, if applicable, the period covered by the ASF and the specific date when the ASF will be debited from the Bank's/NBQB's Demand Deposit Account (DDA) with the BSP. The BSP will not accept checks as mode of ASF payment. Banks/NBQBs, 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 Subsections X901.1 (2008 - X608.1) and 4901Q.1 (2008 - 4652Q) of the MORB and MORNBFI, respectively, as amended, shall apply. 3. Exceptions Noted on Billing Notice of 2017 ASF Upon receipt of the BSP Notice of ASF billing, a Bank/NBQB 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. MabiniStreet Malate, Manila 1004 Any exceptions received after the cut-off date or any exceptions not duly 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 on2OL7 Supervisory Fees The following shall apply to Banks/NBQBs covered by Sections M and N of Bureau of lnternal Revenue (BlR) Revenue Regulations (R.R.) No. 2-98, as amended by R.R. No. 17-2003, and R.R. No. 2-2OO6: 4.I Within seven (71 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 BIR Notice classifying it under Section M of R.R. No. 2-98, 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, shall 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 30 July 2Ot7. The BIR Form No. 2307 shall accurately indicate, among others, the following details: 4.3.1 Payee: Bangko Sentral ng Pilipinas 4.3.2 Tax ldentification Number: 000-354-790-000 4.3.3 Address: A. MabiniSt. corner P. Ocampo Sr. St., Malate, Manila 4.3.4 Zip Code: L004 4.3.5 The BIR-registered name of the payor-bank/-NBQB, as exactly indicated in the BIR Certificate of Registration (BlR 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/NBQBs have other transactions

with BSP, a separate BIR Form 23O7 for the transaction/s shall be provided to BSP. 4.4 ln 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. In case of DDA deficiency, the provisions in Subsections X901.1 (2008-X508.1) and 4901Q.1 (2008- 4652Q) of the MORB and MORNBFI, respectively, as amended, shall apply. This Memorandum shalltake effect immediately. For strict compliance. G. FONACIER I b r"aruary 2oL7

' Annex A Scenarios for computation of 2017 Annual Supervisorv Fee (ASF) 1. Upgrade from one bank category to another Scenarion A: RB A upgraded to become TB A as of August 2015 The quarterly FRp of RB A will be combined with the monthly FRP of TB A and the TB rate will be applied. 2016 FRP Net Assessable Assets RBA I rsn Jan Feb Mar 148,993,450.20 148,993,450.20 Apr May Jun 1s9,53s,839.50 159,635,839.50 Jul Aug L70,278,228.80 L70,278,228.80 sep 168,700,764.00 L68,700,764.O0 Oct L68,L85,770.40 L68,t86,770.4O Nov t77,7LO,888.80 L77,7LO,888.80 Dec 192,866,280.80 192,865,280.80 Sum of Net Assessable Assets L,L86,372,222.50 7 No. of reporting periods Average Assessable Assets L69,48L,746.O7 ASF rate forTB (L/28 of L%l 0.000357143 ASF for 2017 for TB A 60,529.20 2. Downgrade from one bank cateSory to another Scenario B: TB A downgraded to become RB A as of October 2015 The monthly FRp of TB A will be combined with the quarterly FRP of RB A and the RB rate will be applied' 2015 FRP Net Assessable Assets rBA I nsn Jan 192,865,280.80 192,865,280.80 Feb L83,222,956.75 L83,222,966.76 Mar L74,06L,8L8.42 L74,06t,8L8.42 Apr L65,358,727.50 t65,358,727.50 May L57,090,79t.L3 1s7,090,791.13 Jun L49,236,25L.57 t49,236,251.57 Jul L4L,774,438.99 L4L,774,438.99 Aug t34,685,7L7.O4 t34,685,7t7.O4 sep L27,95L,43L.L9 L27,95L,43L.L9 Oct Nov Dec 121,553,859.63 121,553,859.53 Sum of Net Assessable Assets t,547,802,283.03 1C No. of reporting Periods Average Assessable Assets L54,780,228.30 0.00025 ASF rate for RB (1/40 of 1%) ASF for 2017 for RB A 38,695.06

3. Consolidation: Two or more entities combine to form a new single entity. The original entities cease operations after the new entity started its operations. Scenario C: RB A and TB B consolidated in Jan 201-7 to form a new TB C. The assessment of the 2017 ASF is on February 2OL7 Since the consolidation was prior to the assessment for 2OL7 ASF, the Net Assessable Assets of the two banks in 2016 will be combined and the TB rate will be applied 2016 FRP Net Assessable Assets RBA I rEB I TBC Jan L64,658,792.OO t64,658,792.OO Feb 163,861,844.80 163,851,844.80 Mar 2t,928,5O4.OO L65,3L1,225.60 L87,239,729.60 Apr 153,357,155.20 153,357,155.20 May L54,30r,374.40 r54,30t,374.40 Jun 22,295,t42.t5 168,488,953.20 190,784,105.35 Jul L70,373,352.00 t70,373,352.OO Aug L70,278,228.80 L70,278,228.80 sep 22,320,467.O5 L68,700,764.00 LgL,02t,23t.O5 Oct 168,L86,770.40 L68,L86,770.40 Nov L77,7L0,888.80 L77,7LO,888.80 Dec 22,383,648.40 192,865,280.80 2L5,249,929.20 Sum of Net Assessable Assets 2,LO7,023,40L.60 L2 No. of reporting periods Average Assessable Assets L75,585,283.47 ASF rate forrB F/28 ol t%l 0,000357143 ASF for 2017 for TB C 62,709.O3 Scenario D: RB X and TB Y consolidated in November 2016 to form a new TB Z' The 2016 AAA of RB X as reported in its FRp for 3 quarters will be combined with the 201.6 Net Assessable Assets of TB Y and the 2016 AAA of TB Z and the TB rate will be applied 2016 FRP Net Assessable Assets RBX I rsY I TBz Jan 774,949,966.50 174,949,966.50 Feb L74,L03,2L0.10 L74,r03,zLO.LO Mar 20,638,592.00 L75,643,L77.20 t96,28t,769.20 Apr t52,94L,977.40 L62,94L,977.40 May 163,945,210.30 163,945,210.30 Jun 20,983,653.20 !79,O19,523.40 200,003,185.60 Jul 181,021,686.50 181,021,686.50 Aug 180,920,618.10 180,920,618.10 sep 2L,007,498.40 L79,244,56L.75 200,252,060.t5 Oct 178,598,443.55 178,598,443.55 Nov 199,705,941.95 Dec Sum of Net Assessable Assets No. of reporting periods Average Assessable Assets L86,04L,7t7.2t ASF rate forTB (U28 of t%l 0.0003s7143 ASF for 20L7 forTBZ

t tr,, rt ' ' 4. Merger: One entity absorbs another entity and continue to operate as the surviving entity whale the absorbed entity ceases to operate Scenario E: RB D and TB E merged in January 2017 with TB E as the surviving entity Assets The 2015 AAA of RB D as reported in its FRp for 4 quarters will be combined with the 2015 Net Assesable of TB E and the TB rate will be applied 2016 FRP Net Assessable Assets RBD I rsE I Total Jan L54,357,5t7.50 L54,357,6L7.50 Feb 153,520,479.50 t53,620,479.50 Mar 23,2L8,4L5.00 t54,979,274.OO 178,197,690.00 Apr L43,772,333.O0 L43,772,333.00 May 144,557,538.50 144,557,538.50 Jun 23,606,62L.r0 157,958,403.00 181,565,024.10 Jul L59,725,OL7.50 t59,725,OL7.sO Aug :. 159,635,839.50 159,635,839.50 sep 23,633,435.70 158,156,955.25 181,790,401.95 Oct L57,575,097.25 t57,675,097.25 Nov L73,442,606.98 L73,442,606.98 Dec 23,700,333.50 187,318,015.53 2Lt,0L8,349.13 L,999,467,994.9L Sum of Net Assessable Assets T2 No. of reporting periods Average Assessable Assets t66,622,332.9t 0.0003s7143 ASF rate forTB (L/28 of L%l 59,507.98 ASF for 2017 forTB E Scenario F: RB V and TB W merged in November 2OL6 with TB W as the surviving entity Assets The 2015 AAA of RB V as reported in its FRp for 3 quarters will be combined with the 2016 Net Assessable of TB W and the TB rate will be applied 2015 FRP Net Assessable Assets RBV I raw I rot.t Jan 185,241,141.00 L85,24t,L4t.00 Feb L84,344,575.40 t84,344,575.40 24,508,328.00 185,975,128.80 2L0,483,456.80 Mar L72,526,799.60 L72,526,799.60 Apr r73,589,046.20 L73,589,046.20 May 24,918,100.05 189,550,083.50 2L4,468,L83.65 Jun LgL,670,02L.00 191,570,021.00 Jul 191,553,007.40 191,553,007.40 Aug 24,946,404.35 189,788,359.50 2t4,734,763.85 5ep 2L4,734,763.85 2t4,734,763.85 Oct 236,208,240.24 236,208,240.24 Nov 255,104,899.45 255,104,899.45 Dec 2,444,658,898.44 Sum of Net Assessable Assets L2 No. of reporting Periods 203,722,408.20 Average Assessable Assets 0.000357143 ASF rate forTB (L128 of L%l 72,758.00 ASF for 2017 forTB W the 2017 ASF' Note: In cases where the RB is the new or surviving entity, the rate for the RB will be applied in determining

a | ' 'v e ,. r ' 5. Amendment of reports used in the computation of ASF Scenario G: RB E amended its Dec 2015 FRP in Jan 2017 the 2017 AsF The 201G ASF will be recomputed and the resulting under/(over) collection will be added to/(deducted)from *Recomputotion of 2076 ASF Computation of 2017 ASt RB E 2075 FRP Net Assessoble Asssets RB E 2016 FRP Net Assessable Assets Originol Amended 78,522,548.05 78,522,548.05 Mar L9,864,644.80 79,605,793.15 79,605,793.75 Jun 20,t96,775.83 20,2L9,7t7.2r sep 20,644,777.95 20,644,771.95 9s2.08 Dec 27,484,407.05 27,883,458.27 of Net Assessable Assets 80,257,520.20 80,656,571.42 4 4 Sum of Net Assessable Assets 80,5s8,089.92 of reporting Periods 4 Assessoble Assets 20,064,380.05 20,764,742.85 No. of reporting Periods SF rote for RB F/aO of 1%) 0.00025 Average Assessable Assets 20,139,522.48 0.0002 ASF for 2016 5,047.04 ASF rate for RB (1/40 of 1%) : ASF collected for 2075: 4,975.78 for 2017 5,034.88 : 2% CWT collected in 2076: 100.32 Over) Collection of 2015 ASF' 24.94 24.94 TOTAI ASF fOT 2QL7 spsrs, lJ nder/(Over) Colledion 2%CWT LOt.20 ASF for 2017 .62