Covered borrowing transaction and entities
- Financial institutions that participate in the Government Service Insurance System (GSIS) Industrial and Commercial Lending Program may have borrowings from GSIS.
- The Circular covers borrowings arising from participation in the Industrial and Commercial Lending Program.
Core legal treatment: no deposit substitute status
- BSP Circular No. 1257 provides that GSIS borrowings arising from the Industrial and Commercial Lending Program are not considered deposit substitutes.
- Because the borrowings are not deposit substitutes, they are not subject to legal reserve requirements.
Core legal treatment: no liquidity floor requirement
- BSP Circular No. 1257 provides that such GSIS borrowings are not subject to the liquidity floor requirement applicable to borrowings from the government.
Monetary Board basis for the rule
- The Monetary Board resolves that the Industrial and Commercial Lending Program borrowings should not be treated as deposit substitutes.
- The Monetary Board also resolves that the same borrowings should not be treated as subject to the liquidity floor requirement on government borrowings.
Administrative designation and signature
- The Circular is signed by JOSE L. CUISIA, JR., BSP Governor.
- The Circular is issued under the authority of the Monetary Board through Resolution No. 1068 dated October 15, 1990.