Question & AnswerQ&A (BSP CIRCULAR NO. 175)
It applies to rural banks who are members of the Philippine Clearing House Corporation (PCHC) and thrift banks authorized to accept demand deposits and participate directly in PCHC and BSP clearing operations.
It represents the collateralized overnight clearing line extended by the BSP, against which rural and thrift banks can avail loans bearing interest at the 91-day Treasury Bill rate.
Unwinding of clearing transactions is authorized, following procedures that involve ranking inward items from highest to lowest aggregate value and eliminating unsettled net clearing losses by unwinding inward items.
The Bangko Sentral ng Pilipinas (BSP), specifically through its Department of Loans and Credit (DLC).
All inward items other than 'Returned Items' and only for local exchanges are subject to unwinding procedures.
Not later than 9:00 o'clock AM of the following clearing day.
It is defined as the next clearing day when dishonored checks are returned within the reglementary period after the date of presentation for local clearing within the integrated Manila Clearing area and BSP regional clearing centers.
The interest rate is the 91-day Treasury Bill rate of the last auction immediately preceding the availments.
The BSP Accounting Department is authorized to instruct PCHC and BSP regional clearing centers to unwind clearing transactions following the procedures defined in Section 3 of Circular 163 as amended.
The Circular and guidelines took effect on September 15, 1998.