QuestionsQuestions (BSP CIRCULAR NO. 616)
To clarify and amend the applicability of DOSRI rules and regulations on government borrowings, specifically excluding Local Water Districts (LWDs) from being treated as related interests of the Republic of the Philippines (ROP) for these regulations.
Sections X326 to X337 of the MORB are made applicable to loans, other credit accommodations, and guarantees granted to the National Government/ROP and certain government entities, subject to the clarifications in the Circular.
They are considered (a) non-risk and (b) not subject to any ceiling.
They are considered indirect borrowings of the ROP and form part of both the individual ceiling and the aggregate ceiling, subject to specified exclusions.
(1) Priority infrastructure projects consistent with the Medium-Term Development Plan/Medium-Term Public Investment Program certified by the Secretary of Socio-Economic Planning; (2) loans to participating financial institutions in government lending programs intended for relending; and (3) rediscounting facilities and guarantee programs for loans for the agricultural sector and MSMEs.
Loans, other credit accommodations, and/or guarantees granted to SUCs are excluded from the 30% ceiling on unsecured loans under Sections X330 and X331.
Because BSP is independent under the Constitution and has fiscal autonomy; therefore, it is not a related interest of the ROP for these regulations. Loans/credit accommodations/guarantees of BSP are considered non-risk and not subject to any ceiling.
LGUs are considered separate from the ROP and from one another due to full autonomy in proprietary functions and management of economic enterprises under the Local Government Code, subject to limitations provided by law; hence not related interests of the ROP.
LWDs are considered separate from the ROP, other government entities, and from one another due to fiscal independence from the national government; hence they are not a related interest of the ROP or its agencies/departments/bureaus for purposes of these regulations.
No. Such a director is not excluded from deliberation or from determining the majority of directors for loans, other credit accommodations, and guarantees to the ROP and/or its agencies/departments/bureaus.
The director shall be excluded in deliberation as well as in the determination of majority of the directors in cases of loans, other credit accommodations, and guarantees to the borrowing government entity other than the ROP and its agencies/departments/bureaus where said director is also a director, officer, or stockholder.
It provides that the Circular’s provisions also apply to the Q-Regulations and regulations of the Manual of Regulations for Non-Bank Financial Institutions (MORNBFI).
Fifteen (15) days following its publication in a newspaper of general circulation.
Such loan may be excluded from the 30% ceiling on unsecured loans under Sections X330 and X331, provided it falls under the certified priority infrastructure category listed in the Circular.
Because the Circular uses the 20% threshold to classify loans to such corporations as indirect borrowings of the ROP, making them part of the individual and aggregate ceilings (unless specifically excluded under the listed exceptions).