Volume 14 Number 3 (July to September 2003) - University of the ...

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National Administrative Register Volume 14/3
secured by obligations of the BSP or of the Philippine Government; (b) loans fully
guaranteed by the government as to the payment of principal and interest; (c)
loans fully secured by US Treasury Notes and other securities issued by central
government and central banks of foreign countries with the highest credit quality
given by any two internationally accepted rating agencies; (d) loans to the extent
covered by the hold-out on or assignment of, deposits maintained in the lending
bank and held in the Philippines; (e) loans and acceptances under letters of
credit to the extent covered by margin deposits; and (f) other loans or credits
which the Monetary Board may, from time to time, specify as non-risk assets,
shall at no time exceed twenty five percent (25%) of the unimpaired capital and
surplus of the bank.
This Circular shall take effect immediately.
Adopted: 29 July 2003
Date Filed: 15 August 2003
(SGD.) RAFAEL B. BUENAVENTURA
Governor
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Memorandum
Guidelines for the Issuance of Unsecured Subordinated
Debt (USD) Eligible as Tier 2 Capital of Banks
Memorandum to All Banks and Non-Bank Financial Institutions Concerned dated 17
February 2003, as amended, on the guidelines for the issuance of unsecured subordinated
debt (USD) eligible as Tier 2 capital of banks, specifically the first paragraph of Section 1
(Accounting Treatment) thereof is hereby amended, to read as follows:
ìObligations arising from the issuance of USD shall be booked under a new
General Ledger account title ìUnsecured Subordinated Debtî, which shall be
presented as a last item in the Liability Accounts Section of the Statement of
Condition. However, only the net proceeds actually received from the debt
issues shall be considered as Tier 2 capital. Moreover, if the debt is issued at
a premium, the premium shall not be counted as part of Tier 2 capital.î
To implement the aforesaid Section I (Accounting Treatment) of the Memorandum, the
Manual of Accounts and reportorial requirements for universal banks and commercial banks
prescribed under Circular No. 108 dated 9 May 1996, as amended, are accordingly amended
to incorporate the following:
I. Creation of new general and subsidiary ledger accounts, as follows:
Liability Accounts