Reforms on the Foreign Exchange Regulatory Framework

f ko Sentral ng Pi mas

MAYNILA, PILIPINAS

OFFICE OF THE GOVERNOR

Circular No. 698

Series of 2010

Subject: Reforms on the Foreign Exchange Regulatory Framework

Pursuant to Monetary Board Resolution No. 1496 dated

No. 645 dated 13 February 2009 are hereby amended as follows: 28 October 2010, the following provisions of the Manual of Regulations on Foreign Exchange Transactions (FX Manual) issued under Circuiar

sell foreign exchange to residents to cover payments to non-resident beneficiaries for non-trade current account purposes (e.g., educationat andAAB-Forex Transactions with Non-Residents. AABs and AAB-forex corps may expenses, medical expenses, travel expenses and saiaries of foreign expatriates), other than those relating to foreign/foreign currency foans and investments, without need for prior BSP approval, subject to the submission/presentation of the following to the foreign exchange selting "Section 2. Sale of Foreign Exchange to Residents by AABs CorpsforNon-TradeCurrentAccount

institution:

1. For sale not exceeding USD60,0o0 or its equivalent in other

foreign currency

Duly accomplished application to purchase foreign exchange using the prescribed format (Annex A):

2. For sale exceeding USD60,000 or its equivalent in other foreign currency

Duly accomplished application to purchase foreign

supported by documents prescribed under item A of exchange using the prescribed format (Annex A) Appendix 1 hereof.

X x x

"Section 3. Sale of Foreign Exchange to Non-Resident Tourists/Balikbayans by AABs and AAB-Forex Corps. AABs and AAB-forex corps may sell foreign exchange to non-resident tourists or

them for pesos to said entities. Departing non-resident tourists or balikbayans to the extent of the amount shown to have been sold by batikbayans may reconvert at airports or other ports of exit unspent pesos up to a maximum of USD5,0o0 or its equivalent in other foreign

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currency calculated at prevailing exchange rates, without showing proof/s of previous sale of foreign exchange for pesos.

transactions to the BSP-International Operations Department (IOD) using the prescribed forms (Annexes B and C). All applications to in other foreign currency without prior BsP approval, for partiaf or ful advance payment for importations in accordance with the guidelines sell foreign exchange to importers, up to USD1 million or its equivalent under Appendix 7 hereof inciuding documents prescribed thereunder purchase foreign exchange in excess of usD1 million or its equivalent The foreign exchange sefling/remitting AAB shall report these "Section 13. Advance Payment. AABs and AAB-forex corps may

shall be filed directly with the BSP-IOD for prior approval. in other foreign currency to service advance payment for importations

"Section 29. Servicing of Loans

for servicing of foreign/foreign currency loans shall be directly remitted to the creditor/beneficiary concerned on the day of purchase, unless otherwise explicitly allowed by BSP. 1. All foreign exchange purchases from AABs or AAB-forex corps

Ioans duly registered with the BSP may be remitted through AABs as 2. Payments for principal, interest, fees and related charges on

these fall due without prior BSP approval provided such interest, fees

hereof. and charges are indicated in the BsP registration document, and upon presentation of documents prescribed under Item B of Appendix 1

BSP approva: 3. Payments for the following shall, however, be subject to prior

sector loans O Prepayment of public sector/publicly guaranteed private

b. All loans that are past due for more than 30 calendar days reckoned as follows:

1) For short-term loans, from the 36oth day after availment; and

2) For MLT loans, from originai maturity date.

C Other loan-related fees/charges not authorized by the BSP; and

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D Loans covered by official rescheduling with Paris Club creditors.

prepayments (i.e., payments before original due dates) of MLT private sector ioans (including bonds and notes) that are not publicly without prior BsP approval, subject to the following conditions: guaranteed and are covered by a BSP registration document (BSRD) 4. AABs and AAB-forex corps may selt foreign exchange for

a. The borrower shall submit to the BSP-IOD a notice of their

Bsp registration number for the loan, date of prepayment. intention to prepay at least one (1) month prior to the target amount to be prepaid in original currency, and remittance prepayment date indicating the following: name of creditor

instructions (e.g., account number and recipient bank for the the duly stamped BSRD and its Form 2 report (Report on prepayment). After payment, the borrower shall submit to the BSP-IOD, proof/s of the payment made, together with copy of Foreign Borrowings for the month).

b. The foreign exchange selling AAB/AAB-forex corp shall require the presentation by the borrower of documents prescribed under Item B, Appendix 1 hereof.

C The foreign exchange purchases shall not exceed

to be prepaid. The daily limit shall be subject to periodic USD50 million per day, provided that the tota! foreign review to take into consideration prevailing conditions; revised limits shall be duly disseminated by the BSP. exchange purchases shall not at any case exceed the amount

d. Advance foreign exchange purchases shall be deposited in the borrower's FCDU/offshore account pending remittance of the full amount to the creditor at the target prepayment date.

e. The foreign exchange selling institution shall see to it that documents evidencing payment of applicabie documentary stamp tax, if any, are presented/available.

The foreign exchange sold shall be duly reported by the Report on Foreign Exchange Assets & Liabilities) -- Schedule 4 foreign exchange-selling AAB under FX Form 1 (Consolidated following the deadline for submission of FX Form 1.

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Ioan-related payments shail be submitted to any AAB or AAB-forex corp using the prescribed form (Annex A) and supported by documents prescribed under item B, Appendix 1 hereof. 5. Applications to purchase foreign exchange for servicing of

residents for payment of foreign exchange obligations to residents other than AABs. 6. AABs and AAB-forex corps shall not sell foreign exchange to

BSP-{OD using the prescribed form (Annex F). foreign exchange used, shali be reported by the borrower concerned to All loan payments made, irrespective of the source of the

Section 40. Repatriation and Remittance Privileges

1. Inward foreign investments duly registered with the BSP or with

dividends, profits and earnings using foreign exchange to be purchased from AABs and AAB-forex corps. a custodian bank duly designated by the foreign investor, shall be entitled to full and immediate repatriation of capital and remittance of

AAB-forex corps for outward remittance in an amount eguivalent to the earnings thereon) of BSP-registered foreign investments in accordance with the procedures outlined in Appendix 11 and supported by the peso sales/divestments proceeds (including dividends, profits or documents prescribed under Items C.1 and C.2 of Appendix 1 hereof. 2. Foreign exchange may be purchased from AABs and

with inward remittance of foreign exchange but not to exceed the for BSP-registered investments made in the country, subject to the following conditions: remittance the eguivalent foreign exchange of excess pesos funded amount of foreign exchange brought in less the amount actually used 3. Registering banks for foreign investments may sell for outward

a. the investor shall comply with the prescribed documents under Item C.3 of Appendix 1 hereof;

b. such excess pesos should not have been utilized to fund

any investment; and

c. the remittance of the equivalent foreign exchange shall two (2) banking days from the date of outward remittance, be reported to the BSP-IOD by the remitting AAB within with copies of the prescribed supporting documents.

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on behaif of the non-resident investor for direct remittance to the non-resident beneficiary on the day of purchase. The foreign exchange purchases may be made by the resident agent

"Section 44. Investments by Philippine Residents

I. Outward Investments.

a. Residents may undertake outward investments onfy if:

: the investments are funded by withdrawals from the resident investor's FCDU account/s; or

I the funds to be invested are not among those required to be sold to AABs for pesos under existing BSP rules; or

H the funds to be invested are purchased from AABs or

USD60 million or its equivalent in other foreign currency per investor per year, or per fund per year for qualified investors AAB-forex (Qs. corpsbutin amountsnot exceeding

(Annex A) shall be supported by documents prescribed under Item C.4 of Appendix 1 hereof. Application to purchase foreign exchange for outward investments

foreign exchange purchased from AABs or AAB-forex corps in excess approval by the BSP: Provided, That the purchase of foreign exchange of the UsD6o million limit per investor per year shall require prior purchases by the principal or trustor of such accounts for determining compliance with the limits. Outward investments of banks shall be subject to existing prudential regulations of the BsP. for outward investments by managed or trusteed accounts (other than pooied funds) shall be considered as part of the foreign exchange b. Outward investments by residents (excluding AABs) funded with

investment limit. For purposes of this section, Qis shail be limited to the following: insurance and pre-need companies; collective/pooled funds) whether in a corporate or contractual structure, such as mutual funds. unit investment trust funds and variable insurance; public or private c. QIs may apply with the BSP for a higher annual outward

financial sophistication, size and regularity of financial transactions, net funds as the BSP may determine as QIs on the basis of such factors as pension or retirement or provident funds and such other entities and

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worth and size of assets being managed. The application of collective/pooled funds and pension, retirement and provident funds for a higher annual outward investment limit may be effected through its governing board or through its trustee.

Residents may purchase foreign exchange from AABs or AAB-forex corps without prior BSP approval for investments in the following: Philippines or other Philippine resident entities; and (b) peso- supported by documents prescribed under Item C.5 of Appendix 1 hereof. (a) foreign currency-denominated bonds/notes of the Republic of the Philippine resident entities requiring settlement in foreign currency. Provided, That: such purchases shall be consolidated with foreign denominated bonds/notes of the Republic of the Philippines or other exchange purchases for outward investments under item 1.b hereof for purposes of determining compliance with the allowed limit, and 2. Investments in bonds/notes issued by residents offshore.

under items 1 and 2 hereof funded by foreign exchange purchased hereof, need not be inwardly remitted and sold for pesos through to the foreign exchange selling-AAB/AAB-forex corp, together with intended for reinvestment in instruments covered by items 1 and 2 dividends/earnings or divestment proceeds from investments made from AABs or AAB-forex corps shall be inwardly remitted and sold for For this purpose, an affidavit of undertaking shall be executed by the resident investor using the prescribed format (Annex K) to be submitted other documents prescribed under Items C.4 and C.5 of Appendix 1 hereof for the purchase of foreign exchange. The said proceeds, if AABs:Provided. pesos through AABs within 3o banking days from receipt of the fundsj 3. Foreign exchange acquired or received by residents as . That such proceeds are reinvested within 30 banking days from receipt of the funds."

likewise been revised accordingly: The following Appendices to and Annexes of the FX Manual have

1. Annex A: Application to Purchase Foreign Exchange 2 (Attachment 1 hereof); Appendix 1: Minimum Documentary Requirements for the

3 Appendix 7: Guidelines for the Sale of Foreign Exchange to Sale of Foreign Exchange for Non-Trade Purposes (Attachment 2 hereof)

Payment of Imports (Attachment 3 hereof); Importers by AABs and AAB-Forex Corps for Advance

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4 Annex B: Monthly Report on Sale/Remittance of Foreign

5. Annex C: Monthly Report on Purchase of Foreign Exchange 8. Monthly Report on Foreign Exchange Sales by AABs for 6 1 hereof): from Refund of Advance Payment of Importations (Attachment 6 hereof) Divestment Proceeds of Outward Investments by Residents Annex F: Monthfy Report on Foreign Borrowings - Form 2 Annex K: Affidavit of Undertaking to Inwardly Remit Exchange for Advance Payment of Imports (Attachment 4 (Attachment 5 hereof): (Attachment 7 hereof) Investments Enumerated under Section 44 of the FX Manual (Attachment 8 hereof)

provisions of existing circulars, memoranda and/or other regulations that are inconsistent herewith. Repealing Clause. This Circular supersedes/amends/modifies the

publication either in the Official Gazette or in a newspaper of generai circulation in the Philippines Effectivity. This Circular shall take effect 15 calendar days after its

FOR THE MONETARY BOARD:

Xw Amandom. tetangco, Jr Governor

November 2010

APPLICATION TO PURCHASE FOREIGN EXCHANGE (FX)) AUaCH AnneX a

Reference No.

TO: (Name of AAB/AAB-forex corp)

(Address)

I/We hereby apply to purchase foreign exchange with the following details:

APPLICANT: Name Address Tel. No./Fax Na./Email Address

(For individuals; piease underline the appropriate ID used): : SSS/GSISNoter's ID No./Driver's Lic. No. Tax Identification No

AMOUNT APPLIED FOR (Indicate foreign currency) :

PURPOSE: (piease check appropriate box) Trade (payment for importations) C Foreign/foreign currency toans]

Inward Foreign investments by Owed to Non-residents Non-Residents' Owed to Offshore Banking Units Repatriation of Capitat Owed to residents (FCDUs/EFCDUs)

Remittance of Profits/Dividends/Earnings Prepayment Reguiar Payment Remittance in FX equivaient of peso Debt Account No.:

Outward Investments by Residents Investments by residents in foreign Investments by residents in peso- currency- denominated bonds/notes issued offshore by the Republic of the Philippines (RP) lother Philippine entities denominated bonds/notes issued offshore by RP/other Philippine resident entities to be settled in foreign exchange funds (funded by FX remittance) in excess of investments made in the Philippines? C L Direct Investment (Equity Capitat) Portfolio Investment Equity Securities Debt Securities Others Services Transfers (e.g., grants, donations) . ncome Payment? Principal Non-merchandise Insurance Passenger Tickets Others (please specify) Travel Expenses Interest premiums claims/payables Fees Communication Services Commissions Professional/Management Fees Royaities

BENEFICIARY: (Except for travel purpose, medical expenses not yet incurred and sales proceeds of emigrant's domestic assets if emigrant is still in the country) Address Name

swap contract/s has/have been entered into covering the same underlying transaction and that the foregoing 1 hereby certify that no foreign exchange has been purchased either on spot or deliverable forward basis and/or no information are true and correct.

Date of Application Signature Over Printed Name

3 Other than those related to loans and investments , For BSP-registered loans/investments 2 Not to exceed amount of FX brought in less amount actualty used for investments To be accomplished for alt FX purchases from AABs/AAB-forex corps

Attachment 2

Minimum Documentation Requirements' for the Sale of Foreign Exchange (FX) for Non-Trade Purposes by Authorized Agent Banks (AABs)/AAB-Forex Corps

A. Sale of FX for Non-trade Current Account Purposes under Section 2 of the Manual of Regulations on FX Transactions (FX Manual)

Purposes (Ali originals'except as indicated) Documents Required

Foreign travel funds Appticant's passport and ticket

2 Educational expenses/student maintenance abroad Photocopy of proof of enrolment with, or billing statement from, schooi abroad

3. Correspondence studies "Photocopy of proof of enrolment with, or billing

statement from, school abroad

4 Medical expenses Photocopy of billing statement (for services rendered/expenses incurred abroad) or certification issued by doctor/hospitai abroad indicating cost estimate ( for the treatment/service to be administered/ rendered) 5. Emigrants' assets (including inheritance, legacies, and income from properties) b. In the absence of the emigrant, a notarized Special a. Photocopies of: representativelagent. If SPA was executed abroad, original of SPA consulate abroad. Power ii. Notarized Deed of Sale of assets in the iii. Proof of income received from properties in the Emigrant's visa or proof of residence abroad; machineries/ equipment, etc.); and Philippines Philippines of Attomey (e.g. authenticated {SPA} real estate, by fof Philippine emigrant's vehicies,

6 Salary/bonus/dividend/other benefits of foreign nationals (including peso savings) C a b ACR i-Card and DOLE Atien Employment Permit of Employment contract/Certification of empioyer showing amount of compensation paid to the foreign national during the validity of the contract. pesos; if in FX, proof that the FX was previously the foreign national; Applicant's notarized certification that the FX stating whether same had been paid in FX or in soid for pesos to AABs;

remitted is net of local expenses incurred and/or previous transfers abroad; and if amount to be remitted comes from sources other

1) All purchases of FX must be accompanied by duly accomplished application to purchase FX using the 2) It is understood that when a bank certification regarding its client's deposit account is required, the prescribed format. owner of the account should have executed a notarized waiver of secrecy of its deposit.

Attachment 2 Page 2 of 10

APPENDIX Fage 2 c 10

I Foreign nationais' income taxes due a. than safaries/compensation, information regarding should be submitted. ACR-1 Card and DOLE Alien Employment Permit; the sources supported by appropriate documents

to foreign governments B Photocopy of income tax return covering the income tax payment sought to be remitted. and

8. Sates proceeds of foreign nationals domestic assets a b ACR 1-Card, and Photocopy of proof of sate of asset/s indicating

currency of payment 9. Producers' share in movie] revenue/TV film rentals b. Statement of remittable share rental or rental; and Photocopy of contract/agreement

9. Export commissions due to foreign agents 2 b Photocopy of contract/agreement Billing statement from non-resident agent; and

10. Freight charges on exports/imports b a Bifling statement; and Photocopy of contract/agreement 12. Charters and leases of vessels/aircrafts a. b Billing statement from non-resident lessor/owner of vessei/aircraft; and Photocopy of contract/agreement 13. Port disbursements abroad for registry or chartered by domestic aircraft and vessels of Philippine operators and salvage fees a b Photocopy of contract/agreement Billing statement; and

14. Satellite and other Telecommunication services G b Billing statement; and Photocopy of contract/agreement 15. Other services (such as advertising.) consultancy, imformation techno{ogy} a b Photocopy of contract/agreement Billing statement; and

16. Share in Head Office Expenses (including reimbursements) b a C. d the period/s covered; BSRD for the assigned capitat in the branch; Audited schedule/s of allocation of expenses for Certification from the Head Office that the share in Head Office expenses remains unpaid and outstanding; and Audited financial statements of the Philippine

branch 17. Insurance/reinsurance premium due to foreign insurance companies Billings/invoices of insurance companies/ brokers abroad 18. Ciaims against domestic insurance companies by brokers abroad Bilfings/invoices from foreign insurer/ reinsurer

19. Net Peso revenues of foreign airlines/shipping companies a b Photocopy of contract/agreement Statement of Net Peso Revenues (Pesa revenues less expenses) certified by authorized officer of airline/shipping company; and

Attachment 2 Page 3 of 10

AOPENDIX Paaf

20."Royalty I copyright / franchise / 21. Net Peso Revenues of 22. FX obligations of Philippine credit patent/ licensing Fees embassies/consulates of foreign credit card companies/non-resident merchants countries card companies to internationa! a authorized officer expenses) certified by the Embassy's/Consulate's Summary billings b Statement of net peso revenues (Peso revenues fess Statement/computation of the royatty? copyright/franchise/patent/licensing fee; and Photocopy of contract/agreemert.

Private Sector covered by Sections 22 to 31 of the FX Manuai B. Sale of FX for Servicing Foreign/Foreign Currency Loans including Prepayments by

Purpose (All originais except as indicated)1 Documents Required

Loan Payments

1 Medium/ Long-term foreign/foreign

maturities of over 1 year) currency loans (with origina)

a Regular amortization/payment 1.a Bsp registration letter and accompanying

BSP-Registered Foreign/FCDU Loans; and I1- Detaits of FX/Hedging Transactions BSP-Registered Foreign/FCDU Loans and Part Schedule RA-2 (Part }: Scheduie of Payments on fot

1.b. Copy of billing statement from creditor.

Amounts that may be purchased shall be iimited to maturing amounts on scheduled due dates indicated in the registration letter. Purchase and remittance of FX shall coincide with the due dates of the obligations to be serviced, untess otherwise explicitly allowed by the BSP.

or:

2.a. BSp letter-authority for the borrower to purchase

applicabie, the "Scheduie of Foreign Exchange Purchases from the Banking System"; and Fx to service specific ioan account/s and where

1 All original documents shall be stamped "FX-SOLD" indicating the date and amount of FX sold, and whether on spot ar forward basis and signed by the seller's authorized signatory.

Attachment 2 Page 4 of 10

AFPENUX Puge & sf 10

2.b. Copy of bilting statement from creditor.

to the unutilized balance of the letter authority. Remittance of FX purchased shall coincide with the due dates of the obfigations to be serviced. uniess otherwise explicitly ailowed by the BSP Amounts that may be purchased shall be limited

b. Prepayments of foreign/foreign that are not publicty-guaranteed currency loans of the private Sector 1.a BSP registration letter and accompanying Schedule Registered Foreign/FCDU Loans and Part il- Details of FX/Hedging Transactions for BSP- Registered Foreign/FCDU Loans; and RA-2 (Part I: Schedule of Payments on BSP)

1.b Originai of the BSP letter acknowiedging of the borrower's notice of prepayment receipt

up to i year) loans (with original maturity of 2 Short-term foreign/foreign currency

a Loanis from offshore creditors (banks and non-banks) 1.a. International Operations Department (IOD); and BSP approval or registration letter showing ioan terms and borrower's receiving copy of its report on short-term loans as submitted to BSP's

1.b. Copy of bilting statement from creditor.

to: (a) amounts/rates indicated in the BSP report, whichever is lower. Purchase and remittance of FX shall coincide with the due dates of the obligations to be serviced, unless approval or registration letter; or (b) the outstanding baiance of the ioan indicated in the otherwise explicitly allowed by the BSP. Amounts that may be purchased shall be imited

b.Loans from FCDUs/OBUs 1.a the amount outstanding; and BSP approval or registration letter showing loan terms or certification from the lending bank on

1.b. Copy of bilting statement from creditor.

to: (a) amounts/rates indicated in the"BSp approval or registration letter: or (b) the Amounts that may be purchased shaif be limited

Attachment 2 Page 5 of 10

AFEENDX Ta

bank certification, whichever is lower. Purchase dates of the obligations to be serviced, unless outstanding balance of the loan indicated in the otherwise explicitly allowed by the BSP. and remittance of FX shall coincide with the due

Or:

2.a. For loans not requiring BsP approval/ individual true copy by the Head of the iending bank's registration2, Promissory Note (PN) certified as Loans Department and certification from the lending bank:

I On the principal amount still outstanding:

jii. That the loan was used to finance trade I Jv. that the loan is etigible for servicing with FX to be purchased from the AABs/AAB-forex transactions (as well as pre-export costs in On the date when the loan account was corps in line with sxisting regulations; the case of FCDU loans of exporters) of the borrower; and

forms. (This may be dispensed with for reported yet to BSp department/office under the prescribed new loans which may not have been apptication to purchase FX.) reported tothe approprate as of date of BSP

2.b. Copy of bitting statement from creditor.

to amounts/rates indicated in the bank certificationor PN,whichever Purchase and remittance of FX shall coincide with the due dates of the obligations to be serviced, unless otherwise explicitly ailowed by the BSP Amounts that may be purchased shall be limited is Jower.

Payments related to Guarantees and Take Over arrangements) similar arrangements (inciuding Risk

1. For FX liabitities arising from Take Over ArTrangements (RTO)] guarantees and similar arrangements {including Risk b. a. Copies of: BSP approval of the resulting foreign/foreign currency obligation;

2 Individual registration means a BSP registration document is required

Attachment 2 Page 6 of 10

CFPENOIX1 Pgos aa

that do not involve foreign/FCDU Ioans I Agreements/contracts covered by the Standby Letter of Credit (SLC) or guarantee guarantee/similar arrangement;

d C Proof/ notice of original obligors default and creditor's call on the guarantee; and Bitting statement from the non-resident or local contract/agreement for the guarantee;

bank guarantor

2. Regular fees related to Buitd- Operate-Transfer (BOT) and similar financing schemes with b. Copy of the covering agreements/contracts a. BSP Registration Document C Billing statement from the private sector proiect

transfer provisions company/proponent

C. Sale of FX for Servicing of Foreign Investments, Investments by Residents and Related Transactions Covered by Sections 32 to 44 of the FX Manual

Purposes (All originals except as 'indicated)? Documents Required

Foreign Investments

1 Capital Repatriation of:

3 Portfolio Investments in:

I PSE-listed securities BSRD or BSRD Letter-Advice from the registering custodian bank and photocopy of broker's sales invoice

ii. Peso Government Securities iii. Money Market Instruments (MM) BSRD or BSRD Lefter-Advice from the registering custodian bank and photocopy of Confirmation of Purchase for Peso Government Securities BSRD and photocopy of Matured Contract for MM!

IN. 90-day time deposits BSRD or BSRD Letter-Advice from the registering custodian bank and photocopy of Matured Certificate of Deposits for 90-day time deposits

b. Foreign Direct Equity investments BSRD:

C b Photocopy of Proof of Sale or relevant documents

dissolution/capital reduction, proof of distribution of. showing the amount to be repatriated; in case of

3 All original documents shail be stamped "FX-SOLD" indicating the date and amount of FX sold, and whether on spot or forward basis and signed by the seller's authorized signatory.

Attachment 2 Page 7 of 10

APEENDXA Face? o

funds/assets such as statement of net assets in liquidation: C department Photocopy Of Qf Clearance the BSP-Supervision from appropriate and

e Q. Examination Sector (for banks), or from the from the Department of Energy or from the Nationat Power Corporation (for oil/natural gas/geothermai the attached format (Annex N) prepared by the Photocopy Insurance Commission (for insurance companies), Detailed computation of the amount applied for in selling stockholder's representative: companies) Of pertinent audited financia!

I statements; and SEC clearance in case of dissofution.

Remittance of Dividends/ Profits/ Earnings/ Interests a D Photocopy of PSE-cash dividends notice and Phil.l BSRD or BSRD Letter-Advice;

2 Central Depository (PCD) printout of cash dividend payment or computation of interest eamed issued Photocopy of secretary's sworn statement on the Board Resolution covering the dividend declaration; Photocopy of latest audited financial statements or by MMi issuer or bank;

e. For direct foreign equity investments, photocopy of clearance pertaining to the investee firm from from the Nationat Power Corporation (for oil/natural interim financial statements of the investee firm covering the dividend declaration period (for direct foreign equity investments): BSP-Supervision and Examination Sector (for non- PSE tisted banks), insurance Commission (for insurance companies), Department of Energy or Detailed computation of the amount applied for gas/geothermai companies); and using the prescribed format (Annex N).

3 Outward remittance in equivalent [a. FX of pesos (funded by FX inwardly made in the country but not to exceed the amount of FX brought in Iess amount used for investments remitted) in excess of investments b Original certificate of"inward remittance (fully unutilized) or certified true copy of certificate of inward remittance (partially unutilized) showing inward remittance of FX and its conversion to pesos; Swift message/letter request from non-resident investor for return of excess funds;

C Bank certificate on the investor's peso to cover the amount apptied for conversion to FX for remittance. account attesting credit of the excess peso funds to the account and that the amount has been outstanding since the date of credit and is sufficient In case the balance of the peso. cash

Attachment 2 Page 8 of 10

WFENOXA Paga dcf id

account has fallen below the amount applied for conversion and outward remittance, the investor may only purchase up to the amount shown in the certificate.

d Statement from the custodian bank (for foreign

investment) on the investments made funded by a portion of the FX remittance. portfotio investment) or from an authorized officer of the investee firm/seiling investor (for foreign direct

For refunds arising from the unapproved additionat the following additional documents shati be subscription of PsE-listed shares rights offering, required in addition to items 1 - 3 above:

a PSE Circuiars indicating deciaration of

stock rights/warrants offering and the pertinent procedures and implementing guidetines;

b Copy of the Subscription Agreement

with validation of payment/Philippine Depository and Trust Corp. iedger: and {PDTC}

C. Schedule of entitlement of the stock rights indicating the subscribed shares, additionai shares. the approved and unapproved

For remittance of interest earned from the peso pertaining to the excess peso funds for outward cash account, certification from the depository /custodian bank on the remittance. amount Of interest

4. Outward investment

G Direct Equity investments Photocopy of investment proposal/agreement, or

G

b Photocopy of Deed of Sale or Assignment of the subscription agreement;

C A certification on the cumulative FX purchases from investments;

d AABs and AAB-forex corps within the calendar year for outward investments, inciuding investments in Affidavit of Undertaking to inwardly remit and sell bonds/notes of the Republic of the Phitippines and other Philippine entities:

for pesos through AABs within 30 banking days from receipt abroad the dividends/earnings or divestment proceeds from outward investments

Attachment 2 Page 9 of 10

AEENOX1 Fxga 3 nt

I e. Photocopy of BSP approval on FX purchases from investments, inciuding investments in bonds/notes of the Republic of the Philippines and other Photocopy of clearance, regardless of amount, corps using the prescribed format under Annex K: Philippine entities, exceeding UsD60 million per investor per calendar year; and funded by FX purchased from AABs and AAB-forex AABs andAAB-forex corps for outward

from the insurance Commission (IC) for outward from the appropriate department of the BSP- Supervision 'and Examination Sector (SES) for outward direct equity investments of banks and investments of insurance companies.

b. Portfolio Investments b, a C. C Photocopy bond/stock offering; Photocopy of swift payment order instruction from by the broker/trader; A certification on the cumulative FX purchases from the counterparty/broker/trader indicating the name Photocopy of investor's order to broker/trader to buy the securities: of payee and type/kind of investment authenticated Df subscription agreement, o0

AABs and AAB-forex corps within the calendar year for outward investments, including investments in bonds/notes of the Repubiic of the Philippines and other Phitippine entities

f 3 Affidavit of Undertaking to inwardly remit ana seif for pesos through AABs within 30 banking days from receipt abroad of the dividends/earnings or funded by FX purchased from AABs and AAB-forex corps using the prescribed format under Annex K; Photocopy of BSP approvai on FX purchases from divestment proceeds from outward investments

O Photocopy of clearance, regardless of amount, from the insurance Commission (IC) for outward investments. inciudina investments in bonds/notes of the Republic of' the Philippines and other investor per calendar year; and AABs Philippine entities, exceeding UsD60 million per and AAB-forex cotps for outward

investments of insurance companies.

5. Investments in FX-denominated bonds/notes and Phitippine be settied in foreign currency) the Philippines and other Phitippine entities Peso-denominated bonds/notes (to issued offshore by the Republic of a C Photocopy of subscription agreement "or bond the counterparty/broker/trader indicating the name of payee and type/kind of investment authenticated Photocopy of investor's order to broker/trader to offering: Photocopy of swift payment order instruction from by the broker/trader;

Attachment 2 Page 10 of 10

APPENDXA Pane 16 a 10

d A certification on the cumulative FX purchases from buy the securities.

f 2. the Philippines and other Philippine 'entities, Affidavit of Undertaking to inwardly remit and selt for pesos through AABs within 30 banking days from receipt abroad the dividends/earnings AABs and AAB-forex corps within the calendar year for investments in bonds/notes of the Republic of including for outward investments; divestment' proceeds from foreign currency- Philippines and other Phitippine entities funded by FX purchased from AABs and AAB-forex corps using the prescribed format under Annex K; Photocopy of BSP approval on FX purchases from denominated bonds/notes of the Repubtic of the Of

C. investments, including investments in bonds/notes of the Republic of the Philippines and other Photocopy of clearance, regardiess of amount, AABs and AAB-forex corps for outward Philippine entities, exceeding UsD60 million per investor per calendar year; and

from the insurance Commission for investments by insurance companies

All FX purchases for non-trade transactions shall be directy remitted to the (a) intended non-resident beneficiary's account (whether offshore or onshore); or (b)'resident creditor bank, whose FCDU travef funds, medicat expenses abroad not yet incurred, and sales proceeds of emigrant's domestic assets if emigrant is still in the country. Ioans are eligible to be serviced with FX purchased from the banking system. Exceptions to this rule include

Attachment 3

APFENCAT

AABs and AAB-Forex Corps Up to USD1 million or its Equivalent in other Guidelines for the Sale of Foreign Exchange (FX) to Importers by

foreign currency for Advance Payment of Imports

or partiai advance payment of imports may be done without prior BSP approval1 subject to the following guidelines: Sale of FX up to usD1 miflion or its equivalent in other foreign currency for full

1. AABs or AAB-forex corps shall reguire presentation of the originai/submission of copies of the foilowing documents prior to the sale of FX for advance

payment of imports:

a) purchase order (Po);

b) sales contract (SC) or proforma invoice (PI) signed by the resident advance and indicating the intended delivery period of the imported goods; and importer and foreign supplier requiring payment of the importation in

c) notarized Letter of Undertaking (LOU) to the effect that if the importation is supplier and sell same for pesos to the FX selling/remitting AAB on the cancelled, the importer shall inwardly remit the FX refunded by the foreign

same date.

2. if the seller of FX is an AAB, the FX sale and remittance shall be transacted prevailing at the time of remittance, subject to the applicable tax provisions of on the same date and shall involve only one AAB. The FX remittance shall be made directly to the foreign supplier and serviced at the exchange rate

its AAB-forex corp subject for remittance are made in accordance with the National Internal Revenue Code, as amended. if the seiling entity is an AAB-forex corp, the FX proceeds shall be remitted to the foreign supplier through the parent AAB. The remitting AAB shall see to it that sales of FX by existing rules.

3. The importer shall present to the FX selling/remitting AAB the original shipping documents [import invoice and bill of lading (BIL) or air waybill thereof. (AWB)] where the date and amount of FX sold/remitted shall be stamped and duly signed by the AAB's authorized signatory, and the Bureau of Customs Import Release Documents, within three (3) banking days after receipt

1 Sale of FX exceeding USD1 miltion or its equivalent for advance payment of imports shall require prior BsP approvat.

Attachment 3

Page 2 of 2

AESENDIXT

g7o?

4. Submission by the FX selling and remitting AAB to the BSP-ID of the following reports:

a. Monthiy Report on Sale/Remittance of FX for Advance Payment of Importations up to USD1 million or its equivalent in other foreign currency the date of FX sale/remittance; and (Annex B) - within the first five (5) banking days of the month succeeding

b. Monthfy Report on Purchase of FX from Refund of Advance.Payment of (Annex C) - within the first five (5) banking days of the month succeeding Importations up to USsD1 million or its equivalent in other foreign currency the receipt of the refund.

5. The FX selling/remitting AAB shalf report to the BSp under FX Form 1 (Consolidated Report on Foreign Exchange Assets and Liabilities) the following transactions:

a. The remittance of FX by the AAB for advance payment of imports as Disposition for Loans); "Import Advances/Down Payments" (Code No. 04o) under Schedule 4 (FX

b. The purchase of FX by the AAB from the importer arising from a refund of advance payment on cancelled imports as "Refund of Import Advances/Down Payments" (Code No. 040) under Schedule 3 (FX Acquisition from Loans); and

c. In case of importations with partial advance payment whose balance is remittance (DR), such balance shall be reported under the following Schedules: payable through letters of credit (L/Cs), documents against acceptance (DA), open account (OA), documents against payment (DP), or direct

1) Schedule 10 {Import Letters of Credit (L/Cs) Opened and DA-OA Import Avaiiments and Extensions] for L/C (upon opening) and for DA-OA (upon availment); and

2) Schedule 11 (lmport Payments) upon payment.

6. The foregoing rules on advance payments shall apply to importations under all modes of payment.

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a o aa pennre eonnt Atueny Domdopsem

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A aaeaanas XANA seudud Bu (en nea 'ed aeedo eo o

Xto iba tunonn tt retnoaletrtetioorrtttoon iot

yuen jQ aWeN - o oun oy ou. Riiept rt irdnt urot to tttn Snnei uninus

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Date Last Updated: 14 August 2009 Version: 1 Form 04-003-01 1/ Please indicate whether payments were sourced from own funds (CRX) or from the banking system (CRE). (DAN) Account No. Debt Name of Borrower FORM 2

E Country Credltort

{3} Insured by Guaranteed

G Author!ty ContractrBSp Date of Loan

G {Years} Grace Period Maturityl

E G Commitment Com mitment Balance Outstanding Undrawn Totat Status of Loan (Beginning of Month) {In Original Currency} For the Month of .. REPORT ON FOREIGN BORROWINGS INTERNATIONAL OPERATIONS DEPARTMENT BANGKO SENTRAL NG PILIPINAS 9) Transaction [Curency ] Date ot

1) Original

Tet No. Position: 13) 1 Availment Due Date ] Drawdownt ..Transactions During the Month. Submission: Intemational Operations Department Deadline: Within 3 working days after end of reference month

Signature of Authorized Officer 14 Principal P ay ment. Fax No. 15 Iinterest

(1 B Attachment 6

Attachment 7

ANNEX R AFFIDAVIT OF UNDERTAKING

being duly sworn in accordance with law, depose and state that: Filipino and a resident of (name of client) of legal after age

1. I am the duly appointed office at Of organized and existing under the laws of the Philippines, with (Name of Company) (Position/Designation) a corporation duly

2. That l/our company will purchase foreign exchange in the bank) amount of US$ located at from (Name.... of to fund

mylour investment/instrument) investment/instrument) company's investment Of issued by (country) in (Name of Issuer of (Type Qf

3. In compliance with existing and sell for pesos through AABs the dividends/earnings or exchange by AABs and AAB-forex corps to residents for outward investments, including investments in bonds/notes divestment proceeds from the said investments together with the dividends/earnings from the reinvestment thereof within 3o bankingdaysfrom dividends/earnings or divestment. issued by residents, I/our company undertake to inward remit date of regulations on safe of foreign receipt abroad ofthe

Undertaking In witness whereof, On Philippines. this have hereunto signed this Affidavit of day Of at

Signature over Printed Name

Certificate No. SUBSCRIBED AND SWORN TO before me this affiant exhibiting to me his/her Community Tax issued on day of at

NOTARY PUBLIC

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