Law Summary
Conditions for Conversion and Transfer of FCDU/EFCDU Loans
- Board of Directors of banks must approve sound policies governing the redenomination of FCDU/EFCDU loans.
- Banks are required to implement appropriate risk management systems.
- Compliance with FCDU/EFCDU cover requirements and other regulations must be ensured.
- Timely and accurate accounting and reporting of transactions are mandatory.
- No income shall be recognized in either the FCDU/EFCDU or RBU books from the redenomination process.
- Actual settlement in foreign currency must occur simultaneously with the transfer.
- RBU must settle the total amount of foreign currency-denominated loans/ROPA by paying the FCDU/EFCDU using the prevailing foreign exchange/conversion rate at the time of transfer.
Conversion and Transfer of FCDU/EFCDU ROPA
- Similar conditions as those for loans apply to Real and Other Properties Acquired (ROPA).
- Conversion and transfer to the RBU books can be done without BSP approval.
Accounting Procedures
- Annex A (attached to the Circular) prescribes the accounting entries for conversion and transfer of loans and ROPA from FCDU/EFCDU to RBU books.
Repealing and Amendatory Provisions
- This Circular repeals Circular No. 420 dated February 10, 2004.
- Amendments are made to Appendix 17 of the Manual of Regulations on Foreign Exchange Transactions (FX Manual).
Effectivity
- The Circular takes effect 15 calendar days after publication in the Official Gazette or a newspaper of general circulation in the Philippines.
Legal Authority
- Issued by the Monetary Board, endorsed by the BSP Governor Nestor A. Espenilla, Jr.