Amendments to the Manual of Regulations for Banks Subsections X116.1.c and X116.2.a

CIRCULAR NO. 399 Series of 2003

Pursuant to Monetary Board Resolution No. 1062 dated 31 July 2003, the provisions of the Manual of Regulations for Banks are hereby amended as follows:

1.   The last paragraph of Subsection X116.1.1c of the Manual is hereby amended to read as follows:

"c.  Less deductions from the total of Tier 1 and Tier 2 capital, as follows:

X X X

(5)  Reciprocal investments in unsecured subordinated term debt instrument of other banks/quasi-banks in excess of the lower of (i) an aggregate ceiling of 5% of total Tier 1 capital of the bank; or (ii) 10% of the total outstanding unsecured subordinated term debt issuance of the other bank/quasi-bank,

X X X"

2.   The last paragraph of Subsection X116.2.a of the Manual on on-balance sheet assets that are 100% risk-weighted is hereby amended to read as follows:

"100% risk weight -

All other assets including, among others, the following:

X X X

(9)  Reciprocal investments in unsecured subordinated term debt instruments of other banks/quasi-banks in excess of the lower of (i) an aggregate ceiling of 5% of total Tier 1 capital of the bank; or (ii) 10% of the total outstanding unsecured subordinated term debt issuance of the other bank/quasi-bank,

X X X"

This Circular shall take effect on 1 January 2004.

FOR THE MONETARY BOARD:

RAFAEL B. BUENAVENTURA Governor