Law Summary

1. Title and Background

• Document: BSP Circular No. 199
• Date of Adoption: April 27, 1999
• Context: This circular amends the Exporters Dollar Facility (EDF) as established under BSP Circular No. 68, dated April 12, 1995, and subsequently amended by BSP Circular No. 155, dated March 13, 1998.

2. Renaming of the Facility

• Provision: The EDF is now renamed the Exporters Dollar and Yen Rediscount Facility (EDYRF).
• Implication: This change reflects the inclusion of Yen-denominated loans alongside dollar-denominated loans for exporters.

3. Eligibility for Banks

• Legal Principle: Qualified banks may utilize the EDYRF for loans to exporters.
• Requirements:
  • Banks must be recognized as qualified to avail themselves of the facility.
  • Loans must be eligible dollar-denominated or Yen-denominated loans.

4. Specifics for Yen-Denominated Loans

• Legal Principle: Specific terms apply to Yen-denominated loans under the EDYRF.
• Key Definitions:
  • Three-month LIBID on Yen: The interest rate applicable to Yen loans, which is to be reviewed and established every three months.
• Important Requirements:
  • The bank's spread on these loans must not exceed 2% per annum after applicable taxes.
  • Loan proceeds are to be released and repaid in Yen.
  • The assigned Letter of Credit (L/C), Purchase Order (P/O), or Sales/Service Contract (S/C) must specify that payments to the exporter shall be made in Yen.

5. General Provisions

• Legal Principle: All other terms and conditions from the original EDF as per BSP Circular No. 68, as amended, remain applicable to the EDYRF.
• Important Note: The circular's provisions take effect immediately upon adoption.

6. Implementation and Effectivity

• Timeframe: The Circular is effective immediately as of April 27, 1999.

Key Takeaways

• The Exporters Dollar Facility has been renamed to include Yen-denominated loans, thus expanding the financial support available to exporters.
• Qualified banks have clear guidelines to follow regarding eligibility, loan conditions, and interest rates for Yen loans.
• The circular reinforces existing terms from prior regulations while introducing specific provisions for Yen transactions, emphasizing the need for clear contractual stipulations regarding currency payments.

This summary encapsulates the significant aspects and legal implications of BSP Circular No. 199, ensuring clarity and precision in understanding the amended Exporters Dollar and Yen Rediscount Facility.