BSP Rules on Loans Secured by Properties

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BSP CIRCULAR NO. 335, JUNE 17, 2002: BSP Rules on Loans Secured by Properties

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Title Supreme Court: BSP Rules on Loans Secured by Properties

Law: Bsp Circular No. 335, June 17, 2002

Decision Date: Jun 17, 2002

The Monetary Board's June 17, 2002 resolution establishes new regulations for loans secured by chattels and intangible properties, limiting loan amounts to 75% of appraised value and outlining specific criteria for personal property collateral.

personal properties

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Loans and Credit Accommodations Secured by Personal Properties

Loans can be secured by unencumbered personal property which includes:
1. Government-issued bonds and securities, with loan values equivalent to their face or cash value.
2. Readily marketable bonds, high-grade debt securities, and blue-chip stocks, excluding those issued by the lending institution, under conditions that:
  - The issuer must be a listed corporation with at least P1 billion net worth.
  - The issuer must have five consecutive years of earnings.
  - Loan value is limited to 50% of their market value.
3. Expected harvest from financed projects or growing crops, limited to 40% of calculated market value based on previous production or local standards.
4. Quedans or warehouse receipts from bonded warehouses, covering stock deposited, limited to 80% of calculated market value.
5. Other personal property, limited to 50% of fair market value; if newly purchased, loan value is based on purchase price in the bill of sale.

General Provisions and Implementation

This Circular amends or supersedes inconsistent earlier regulations, circulars, or memoranda.
The provisions take effect immediately upon adoption.
Issued under the authority of the Monetary Board and pursuant to Section 38 of Republic Act No. 8791 (The General Banking Law of 2000).

END