BSP Circular No. 1393 (1993)

(NAR) VOL. IV NO. 3 / JULY - SEPTEMBER 1993

[ BSP CIRCULAR NO. 1393, s. 1993, June 23, 1993 ]

AMENDMENT TO CHAPTER I OF CIRCULAR 1389 DATED APRIL 13, 1993 (CONSOLIDATED FOREIGN EXCHANGE RULES AND REGULATIONS)

Pursuant to MB Res. No. 518, dated June 18, 1993, Part Two, Chapter I of Circular 1389 dated April 13, 1993 (Consolidated Foreign Exchange Rules and Regulations) is hereby amended as follows:

1. To delete Section 23.4 thereof and renumber Section 23.5 accordingly.

2. To amend Section 24.5 to read as follows: "5. Short term loans of private exporters/importers from Offshore Banking Units (OBUs) and other offshore sources/creditors, provided that:

a. The loans are not covered by a guarantee from a government financial institution/corporation;

b. The loans shall be exclusively used to finance specific trade transactions i.e. to liquidate/pay for import obligations and/or in the case of export financing transactions, to fund the borrower's pre-export financing requirements;

c. Proceeds of loans intended to pay for foreign exchange requirements shall be paid directly to the supplier/creditor while amounts intended to fund pre-export peso costs shall be inwardly-remitted and sold to the banking system;

d. The loans shall be granted against CB approved short-term relending programs of foreign creditors. Creditors shall submit to the Central Bank their short-term relending program for Philippine borrowers indicating their proposed credit limit together with a list of prospective borrowers/beneficiaries. These relending programs shall be valid for one year but shall be subject to semi-annual review if commitments and/or utilization for the semester shall be below 50% of total relending limit;

e. Drawdown and registration requirements under Sections 27 and 28 hereof shall be complied with;

f. Any assignment of the loan by the creditor concerned shall require prior Central Bank approval; and g. The borrower shall submit to the Central Bank documents cited in Appendix 8 (see below), as amended, at least five (5) days after its credit line is approved by thecreditor." 3. To delete Section 30.2c thereof. This Circular shall take effect immediately. Adopted: 23 June 1993

(Sgd.) JOSE L. CUISIA, JR. Governor APPENDIX 8 DOCUMENTS TO BE SUBMITTED BY PRIVATE SECTOR BORROWERS FOR REGISTRATION OF THEIR SHORT TERM TRADE CREDITS The borrower shall submit to EDD - A. Within five (5) banking days after credit line is granted:

1. A notarized undertaking to the effect that:

a. The loan shall be used exclusively to finance eligible trade transactions;

b. The borrower undertakes not to deposit proceeds of the loan in its FCDU/offshore foreign exchange account;

c. The borrower consents to the Central Bank examination of the specific deposit account/s with their respective authorized agent banks where the peso loan proceeds shall be deposited; and d. It is fully aware of the attendant responsibilities as a borrower as well as the right of the Central Bank to examine its books of accounts and to impose appropriate sanctions for any misrepresentations and/or misapplication of loan proceeds.

2. The company profile which shall include the following documents, if not yet previously submitted/on-file with the Central Bank:

a. Articles of Incorporation and Certificate of Registration with the Securities and Exchange Commission;

b. Capital structure showing the amounts and percentages of equity participation by nationality, together with list of members of the Board of Directors and principal officers/stockholders with respective shares in the equity of the firm, citizenship and resident status;

c. Certificate of Registration with the Board of Investments and other government agencies, if any;d. Latest audited financial statements and interim financial statements if the former is six months old at the time of loan application; and e. Certification from an independent auditor as to the status of the company's short term loans, if any.

3. The relevant loan agreement or alternative document/s evidencing the borrower's acceptance of the loan offer and the terms and conditions therefor, as well as the security/collateral for the same, if any.

B. Within three (3) banking days after end of reference week, weekly report on transactions and status of short term foreign loans (ST-2) obtained.