Amendment to Bank Single Borrower Limits

Banks may increase the loan limit by an additional 10% of their net worth.
This increase applies only if the additional liabilities are secured by trust receipts, shipping documents, warehouse receipts, or similar documents.
The covered goods must be readily marketable, non-perishable, and fully insured.

Banks may further increase loans, credit accommodations, and guarantees by 25% of their net worth for infrastructure or development projects under the government's Public-Private Partnership (PPP) Program.
The projects must be certified by the Secretary of Socio-Economic Planning.
Total exposure to any single borrower for PPP projects cannot exceed 25% of the bank’s net worth.
This additional 25% limit is valid only for three years from the Circular's effectivity.
After three years, existing PPP-related exposures cannot be increased but may be reduced.
Once reduced, exposures to PPP projects cannot be increased again.
Banks must take into account credit risk concentration in assessing capital adequacy and risk profile.

A similar provision is added to Section 4303Q of the Manual of Regulations for Non-Bank Financial Institutions (MORNBFI).
Quasi-banks can increase loans, credit accommodations, and guarantees by 25% of net worth specifically for PPP projects.
The same conditions on certification by the Secretary of Socio-Economic Planning, borrower exposure limits, three-year validity, and risk assessment apply.
Existing PPP-related exposures after three years must not be increased but may be reduced, with no re-increase allowed once reduced.

The Circular becomes effective 15 calendar days after publication in the Official Gazette or a newspaper of general circulation.

The amendments are pursuant to Monetary Board Resolution No. 1611 dated November 15, 2010.
The Circular was adopted on December 6, 2010, signed by the Governor of the Bangko Sentral ng Pilipinas, Amando M. Tetangco, Jr.