Guidelines on US Treasury Warrants clearance

The Circular Letter is issued by the Bangko Sentral ng Pilipinas.
It is signed by EDGARDO P. ZIALCITA, Deputy Governor and In-Charge of IOS.
Adoption is set on 8 Sept. 1992.
The Circular Letter addresses collecting banks and directs institutional compliance through internal dissemination.

The Circular Letter cites Central Bank Circular No. 1353 dated August 24, 1992 as the basis for the liberalization of foreign exchange regulations on trade and non-trade transactions.
The Circular Letter aligns with the operational guidance requested by the Government of the United States through diplomatic communication.

The Circular Letter provides instructions on the clearing and settlement process for U.S. Treasury Warrants (TUS checks).
The guidance ensures that banks use the proper U.S. correspondent collection process for these instruments after the effective date.

The Circular Letter covers U.S. Treasury Warrants, referred to as “TUS (Treasury of the United States) checks”.
The Circular Letter covers both “lipsticked” and “unlipsticked” variants, including their defined legend.
“Lipsticked” refers to warrants bearing the legend: “Payable Only in Pesos through Authorized Agent Bank of the Central Bank of the Philippines and Postal Offices”.
“Unlipsticked” refers to U.S. Treasury Warrants that are not “lipsticked” (i.e., “unlipsticked” TUS checks).
Beginning October 1, 1992, banks must use their United States correspondent collection process for clearing and settlement of these warrants.

Effective October 1, 1992, U.S. Treasury Warrants—whether “lipsticked” or “unlipsticked”—may be deposited in a Foreign Currency Deposit Unit of any AAB.
Effective October 1, 1992, these warrants may be encashed in foreign exchange.
Effective October 1, 1992, these warrants may be converted into pesos at the option of the payee.
The Circular Letter states that these actions require no prior authorization from the Central Bank.
The payee’s option includes conversion into pesos consistent with the Circular Letter’s authorization-free treatment.

AABs must use their own U.S. correspondent collection arrangements for the clearing and settlement of these checks beginning October 1, 1992.
Collecting banks must follow the U.S. correspondent collection process for these warrants after the effective date.
The Circular Letter specifically reflects a process where Citibank Manila clears only those TUS checks presented by beneficiaries directly to Citibank.

The Circular Letter requires that its contents be disseminated to all your branches and offices.
The guidance is intended “for information and guidance” to the recipients handling clearing and settlement.