Authorization for Purchase of Philippine Debt Papers by Foreign Currency Deposit Units (FCDUs)
- Foreign currency deposit units (FCDUs) of local commercial banks authorized under the expanded foreign currency deposit system may now purchase Philippine debt papers.
- Such purchases can be made without prior approval from the Central Bank.
Source of Foreign Exchange for Purchases
- The foreign exchange used for purchasing Philippine debt papers must not be sourced from the banks’ regular accounts.
- This restriction ensures that only funds specifically within the FCDUs are utilized for these investments.
Reporting Requirements
- Banks are required to submit weekly reports on their Philippine Debt Paper transactions.
- Reports must be submitted to the Foreign Exchange Regulations Department of the Central Bank.
- Submission should follow a prescribed format, ensuring standardized reporting and monitoring.
Penalties for Non-Compliance
- Failure to adhere to the requirements of this Circular subjects banks to administrative sanctions.
- Applicable penalties are as outlined in Sections 34 and 34-A of R.A. 265, as amended.
- Sanctions include suspension and/or revocation of the bank’s authority to engage in foreign exchange transactions.
Effectivity
- The Circular takes effect immediately upon issuance on June 23, 1992.
This Circular regulates the procedures and conditions under which foreign currency deposit units of local commercial banks may invest in Philippine debt papers, including compliance measures and enforcement mechanisms.