Law Summary
Submission of Foreign Borrowings Plan
- Resident entities intending medium/long-term foreign loans or offshore bond issuance must submit annual foreign borrowings plan to BSP-International Department.
- Public sector must submit every end-September regardless of amount; private sector submits if borrowings planned are USD 10 million or more.
- Changes or timetables must be reported within two weeks upon availability.
- Loans not in submitted plans incur additional 10% processing fee.
BSP Approval for Foreign Loans Before Signing/Drawdown
- Public sector requires approval before negotiations or commitments to foreign funders.
- Private sector requires approval before signing loan documents or drawing down proceeds.
- Applications with signed documents or drawn proceeds no longer eligible for approval/registration.
Removal of BSP Prior Approval for Private Banks' Foreign Loans
- Private banks no longer need BSP approval for foreign loans longer than one year intended for relending.
- Section 23 amended accordingly.
BSP Approval Required for Non-Residents' Issuance of Bonds or Similar Instruments Domestically
- Non-residents must obtain BSP approval before issuing notes/bonds or similar instruments in the domestic market.
Eligible Projects/Costs for Foreign Borrowing Funding
- Added eligibility for funding acquisition of non-performing assets/loans, government assets approved for privatization, and refinancing existing loans for eligible projects/costs.
Registration of Foreign Loans with BSP
- Short-term loan borrowers must register loans within 10 banking days from drawdown (increased from 3 banking days).
- Medium- and long-term loan borrowers must register within 3 months of utilizing loan proceeds.
BSP Approval for Loan Prepayments
- Prior BSP approval required for loan prepayments serviced with foreign exchange bought from AABs or AAB-forex corps, regardless of days remaining to maturity.
Delegation to Custodian Banks on Registration of Foreign Investments
- Custodian banks authorized to register foreign investments in peso-denominated government securities and peso time deposits with tenor of at least 90 days.
- Custodian banks must obtain written permission from foreign investors to disclose registration info to BSP, ensuring compliance with bank secrecy law.
Penalties for Late Reporting on BSP-Registered Investments
- Reporting under Section 101 reclassified to higher penalty category.
- Penalties increased significantly for unit banks, thrift banks, rural banks, cooperative banks, and remitting banks.
Discontinuation of Foreign Exchange Sales Report by AABs for Outward Investments
- AABs no longer required to submit report on foreign exchange sales for outward investments.
Procedures for Inward Remittance and Sale of Foreign Exchange Proceeds
- Proceeds from divestment or earnings on outward investments funded by foreign exchange from AABs must be inwardly remitted and sold within 7 banking days.
- Reinvestment abroad allowed without inward remittance if made within 2 banking days.
Offshore Banking Units' Peso Deposits Restrictions
- Offshore banking units prohibited from depositing peso equivalent of converted foreign exchange related to inward foreign investments into peso accounts with AABs for payments to Philippine investee firms.
Compliance with Anti-Money Laundering Regulations
- All transactions must comply with Republic Act No. 9160 and its amendments.
Repealing Clause
- Circular supersedes or modifies conflicting existing circulars, memoranda, or regulations.
Effectivity
- Circular takes effect 15 calendar days after publication in the Official Gazette or a newspaper of general circulation.