BSP CIRCULAR NO. 137

: The main subject is the regulation of allowable open foreign exchange (FX) positions of banks in the Philippines.
: Banks' long FX position shall not go beyond 5 percent of their unimpaired capital or US$10 million, whichever is smaller.
: Banks' short FX position shall not exceed 20 percent of their unimpaired capital.
: Any excess beyond the allowable limit shall be settled on a daily basis, and banks have 2 days to bring down their holdings within the allowable limit upon the circular's effectivity.
: Banks that are in excess as of the date of the Circular have 2 days to bring their holdings within the allowable limits.
: Circular No. 137 amended Item 2 of Circular No. 1327 dated January 30, 1992, as amended by Circular No. 54 dated November 11, 1994, Circular No. 63 dated February 23, 1995, and Circular No. 134 dated July 22, 1997.
: The Circular took effect immediately upon its adoption on July 31, 1997.
: The limits are to ensure prudent management of foreign exchange risk exposures by banks to maintain financial stability.
: The prescribed limits are subject to review after 90 days from the date of the Circular.