Amendments on Secured DOSRI Loans

The amendments apply to secured loans, borrowings, or credit accommodations made to DOSRI of banks and non-banks performing quasi-banking functions.
The circular amends the definition of “Secured loan, borrowing, or credit accommodation” in the Manual of Regulations for Banks and Other Financial Intermediaries for Books I to IV.
The rules govern transactions that fall within the Manual provisions cross-referenced in each amended subsection (i.e., Section 1327, Section 2327, Section 3327, and Section 4327Q as applicable per Book).

The circular revises the operative definition of “Secured loan, borrowing, or credit accommodation” for DOSRI transactions by specifying additional qualifying conditions tied to “blue chip” stock issuers and stock loan valuation.
The amendments standardize (for most Books) the qualifying issuer requirements: listed corporation, networth of at least P1 billion, and a record of at least 5 consecutive years earnings based on the immediately preceding 5 years.
The amendments apply a consistent valuation rule for blue chip stocks: loan value equals 50% of the market value (with a specific additional lease receivable valuation rule in Book IV).

Subsection 1326.1.h(1) (Book I) is amended to define “Secured loan, borrowing, or credit accommodation” as any loan, discount, credit, or advance (or portion thereof) secured by enumerated collateral.
The definition covers loans secured by: real estate mortgage; chattel mortgage on tangible assets; standby letters of credit issued by foreign banks excluding Philippine branches of foreign banks; assignment of, or hold-out on, deposits or deposit substitutes maintained in the lending bank; cash margin deposits; or assignment or pledge of government securities or readily marketable bonds and other high-grade debt securities and “blue chip” stocks, except those issued by the lending entity.
The definition imposes additional conditions for using blue chip stocks as collateral:
- the issuer corporation must be a listed corporation with networth of at least P1 billion; and
- the issuer must have a record of at least 5 consecutive years earnings, reckoned from the immediately preceding 5 years.
The definition sets the valuation limit for blue chip stocks:
- the loan value shall be equivalent to 50% of the market value of the stocks.
The definition remains tied to the portion referred to in Section 1327.

Subsection 2326.1.g(1) (Book II) is amended to define “Secured loan, borrowing, or credit accommodation” as any loan, discount, credit, or advance (or portion thereof) secured by the enumerated collateral types.
The definition includes collateral secured by: real estate mortgage; chattel mortgage on tangible assets; standby letters of credit issued by foreign banks excluding Philippine branches of foreign banks; assignment of, or hold-out on, deposits or deposit substitutes maintained in the lending bank; cash margin deposits; or assignment or pledge of government securities or readily marketable bonds and other high-grade debt securities and “blue chip” stocks, except those issued by the lending entity.
The definition requires the blue chip stock issuer to be:
- a listed corporation with networth of at least P1 billion; and
- having a record of at least 5 consecutive years earnings, reckoned from the immediately preceding 5 years.
The definition sets stock loan valuation:
- the loan value shall be 50% of the market value of the stocks.
The definition remains tied to the portion referred to in Section 2327.

Subsection 3326.1.g(1) (Book III) is amended to define “Secured loan, borrowing, or credit accommodation” as any loan, discount, credit, or advance (or portion thereof) secured by the enumerated collateral types.
The definition covers collateral secured by: real estate mortgage; chattel mortgage on tangible assets; standby letters of credit issued by foreign banks excluding Philippine branches of foreign banks; assignment of, or hold-out on, deposits maintained in the lending bank; or assignment or pledge of government securities or readily marketable bonds and other high-grade debt securities and “blue chip” stocks, except those issued by the lending entity.
The definition requires the blue chip stock issuer to be:
- a listed corporation with networth of at least P1 billion; and
- having a record of at least 5 consecutive years earnings, reckoned from the immediately preceding 5 years.
The definition sets stock loan valuation:
- the loan value shall be 50% of the market value of the stocks.
The definition remains tied to the portion referred to in Section 3327.

Subsection 4326Q.1.d (Book IV) is amended to define “Secured loan, borrowing, or credit accommodation” by enumerating secured loan forms and additional credit accommodation items.
The definition includes collateral secured by: real estate mortgage; chattel mortgage on tangible assets; standby letters of credit issued by foreign banks; assignments of or hold-out on deposit substitutes issued by the lending entity; cash margin deposits; or assignment or pledge of government securities or readily marketable bonds and other high-grade debt securities and “blue chip” stocks, except those issued by the lending entity.
The definition expressly includes receivables arising from financial leases to the extent of:
- the guaranty deposit plus
- 60% of the remaining value of the leased equipment.
The definition imposes issuer requirements for blue chip stocks:
- the issuer corporation must be a listed corporation with networth of at least P1 billion; and
- having a record of at least 5 consecutive years earnings, reckoned from the immediately preceding 5 years.
The definition sets stock loan valuation:
- the loan value of the blue chip stocks shall be equivalent to 50% of its market value.