Legal basis and policy linkage
- Monetary Board Resolution No. 1164 (October 11, 1995) adopts, as policy, the exclusion of equity of multilateral financial institutions in determining capital stock ownership by non-Filipino citizens under BSP Circular No. 572, as amended.
- The Circular implements that policy by amending the Manual’s foreign ownership rules in specific sections:
- Subsecs. 1346.4.A (Book I)
- Subsecs. 2346.4.A (Book II)
- Item 4.A of Appendix 18 (Book IV)
Amended definition of “foreign firms”
- Subsecs. 1346.4.A (Book I), 2346.4.A (Book II), and Item 4.A of Appendix 18 (Book IV) are amended to revise the meaning of “Foreign firms.”
- “Foreign firms” refers to partnerships more than forty percent (40%) of whose capital is owned by non-Filipino citizens.
- “Foreign firms” refers to corporations more than forty percent (40%) of whose total subscribed capital stock is owned by non-Filipino citizens.
- The determination of capital stock ownership by non-Filipino citizens must exclude the equity of multilateral financial institutions when the qualifications are satisfied.
Exclusion rule for multilateral financial institutions
- Equity of a multilateral financial institution is excluded in determining capital stock ownership by non-Filipino citizens if the institution satisfies all listed qualifications.
- The multilateral financial institution must be either:
- owned or controlled by member countries, but
- does not possess any national identity.
- The multilateral financial institution must source its funds from:
- capital stock subscriptions and contributions by member countries.
- The primary responsibility of the multilateral financial institution must be to:
- provide funds for developmental purposes and international economic stability.
Technical scope of amendments
- The Circular amends only the specified Manual provisions on foreign ownership determination:
- Subsecs. 1346.4.A (Book I),
- 2346.4.A (Book II), and
- Item 4.A of Appendix 18 (Book IV).
- The amendments operate through a revised definitional rule using the >40% foreign ownership threshold.
- The exclusion applies specifically to determining capital stock ownership by non-Filipino citizens, not to other unrelated ownership tests in the Manual.
Adoption, signatory, and administrative character
- The Circular is adopted on 31 Oct. 1995.
- It is signed by ANDRE NAVATO, Officer-In-Charge.
- The Circular is structured as an amendment instruction that updates the Manual’s operative foreign ownership definitions and thresholds.