Amendments to Foreign Exchange Rules and Regulations (BSP Circular No. 1389, as amended) and Calculation of Foreign Exchange Position (Circular No. 1327, as amended)

CIRCULAR NO. 519 Series of 2006

Subject: Amendments to Foreign Exchange Rules and Regulations (BSP Circular No. 1389, as amended) and Calculation of Foreign Exchange Position (Circular No. 1327, as amended)

The Monetary Board, in its Resolution Nos. 100 and 170, dated 26 January and 10 February 2006, respectively, approved the following amendments to the regulations on foreign exchange and calculation of foreign exchange position -

1. Amendment of Section 72 of BSP Circular No. 1389, as amended, so as to include issuance of Hybrid Tier 1 (HT1) capital instruments among the authorized activities of foreign currency deposit units (FCDUs)/expanded FCDUs (EFCDUs); and

2. Amendment of Circular No. 15 dated 19 February 1994, so as to include the following among the items that may be excluded in the computation of net foreign exchange position prescribed under BSP Circular No. 1327, as amended -

a. "Due from Head Office/Branches/Agencies Abroad-Assigned Capital" account, to the extent of the lower of assigned capital approved by the Bangko Sentral ng Pilipinas or the amount of capital actually remitted; and b. Amount of foreign currency-denominated assets pertaining to the net proceeds of outstanding issues of foreign currency- denominated HT1 capital instruments.

Attached is the revised schedule on the Details of the Accounts Excluded in the Computation of Net Open Foreign Exchange Position, which is an attachment to Schedule 13 of the FX Form I report.

This Circular shall take effect after fifteen (15) calendar days following its publication either in the Official Gazette or in a newspaper of general circulation.

FOR THE MONETARY BOARD

AMANDO M. TETANGCO, JR. Governor