Amendments to the Financial Reporting Package and Additional Reporting Guidelines

MEMORANDUM NO. M-2008-012

To : ALL BANKS

Subject : Amendments to the Financial Reporting Package and Additional Reporting Guidelines

Further to Memorandum No. M-2008-011 dated 7 March 2008, all banks are hereby advised on the following amendments to the FRP and additional reporting guidelines which shall be adopted starting with the reporting period ending 31 March 2008:

(1) Annex A provides the detailed amendments to the General Instructions, Structure of the FRP, Manual of Accounts and Line Item Instructions sections of the FRP. The significant revisions to said sections of the FRP are as follows:

(a) GENERAL INSTRUCTIONS

Who Must Report on What Forms/Schedules

The solo and consolidated FRP shall be prepared on a quarterly basis, except for the solo Balance Sheet and its selected schedules (as listed in Annex A) which shall be prepared on a monthly basis.

All schedules shall be available to any type of reporting bank. Hence, schedules that do no apply to a particular bank should only be left blank when submitted.

Frequencv of Reportinq

The solo FRP shall be submitted within 15 banking days after the end of the reference quarter while the consolidated report shall be submitted within 30 banking days after the end of the reference quarter.

The solo Balance Sheet and its selected schedules on the other hand, shall be submitted within 15 banking days after the end of the reference month.

(b) STRUCTURE OF THE FRP

The geographic regions of non-resident counterparties have been updated consistent with the amendment of the International Monetary Fund's geographic classification of regions.

(c) MANUAL OF ACCOUNTS

The following new balance sheet accounts were created:

Asset Accounts

(i) Sales Contact Receivable Discount and Sales Contract Receivable-Other Deferred Credits

(ii) Accounts Receivable Arising from Sale of Financial Assets under the Trade Date Accounting, which shall comprise of the foliowing sub-accounts:

Accounts Receivable Arising from Sale of Readily Marketable Foreign Currency Denominated Debt Instruments

Accounts Receivable Arising from Sale of Financial Assets Other than Readily Marketable Debt Securities

(iii) Due from FCDU/RBU sub-accounts, which shall only apply to the RBU book:

Due from FCDU/EFCDU-FCDU/EFCDU Realized Losses from Operations

Due from FCDU/EFCDU-FCDU/EFCDU Unrealized Losses Recognized in Profit or Loss and in Equity

Liability Accounts

(iv) Accounts Payable Arising from Purchase of FinancialAssets under the Trade Date Accounting

(v) Due to FCDU/RBU sub-accounts, which shall only apply to the FCDU/EFCDU book:

Due to RBU -FCDU/EFCDU Realized Losses from Operations

Due to RBU -FCDU/EFCDU Unrealized Losses Recognized in Profit or Loss and in Equity

Equity Account

(vi)Retained Earnings Free which shall apply to FCDUIEFCDU book.

(d) LINE ITEM INSTRUCTION

(i) Schedule 11 -Loans and Receivables -Others

Requires the reporting of items 12 to 16 of the Additional Information section at amortized cost (i.e. gross of allowance for credit losses).

Requires disclosure of the following new items in the Additiona! Information section, most of which are currently required in the Schadd file of the Consolidated Statement of Condition:

a. Loans Classified as Loss; b. Credit Card Receivables Classified as Loss; and c. Credit Card Receivables Classifred as Loss during the period.

(ii) Schedule 11a (Total Amount), 11a1 (Peso Accounts), 11a2 (Foreign Regular) and 11a3 fFCDU/EFCDU) -Loans and Receivables-Others -Classified as to Status

Requires disclosure of the follwing additional information:

DOSRI loans secured by non-risk assets; and

Loans granted under the banKs fringe benefit program.

(iii) Schedule 11d (Total Amount), 11d1 (Peso Accounts), 11d2 (Foreign Regular) and 11d3 (FCDU/EFCDU) -Loans and Receivables-Others -Classified as to Type of Business/Industry

Provide guidelines and instructions on how to fill-out the schedule. It emphasizes that Loans and Receivables -Others shall be classified as to the type of business/industry of the counterparty based on the categories provided under the 1994 Philippine Standard industrial Classification, as amended. The schedule likewise requires disclosure of the status under each classification.

(iv) Schedule 11g -Real Estate Exposure Incorporates reportorial requirement for Real Estate Exposure issued under Circular No. 600 dated 4 February 2008 as Schedule 11g of the FRP. Hence, the report on Real Estate Exposure need not be submitted separately.

(v) Schedule 17 -Real and Other Properties Acquired and Non- Current Assets Held for Sale

Incorporates the reporting of Non-Current Assets Held for Sale. An Additional Information section was likewise created which requires disclosure of ROPAs contributed to joint arrangements. (vi) Schedule 19 - Other Assets

Requires the disclosure of the following in the Additional lnformation section:

Accounts Receivable Arising from Sale of Financial Assets under the Trade Date Accounting

Loans to RBU by FCDU/EFCDU

Outstanding amount (before elimination of reciprocal accounts i.e. Due to Branches/Agencies Abroad) of inter-office transactions between the Bank's Head Office and its branches/agencies abroad, which shall only apply to domestic banks with branches/offices abroad.

(vii) Schedule 28 -Other Liabilities

Requires the disclosure of the following in the Additional Information section:

Accounts Payable Arising from Regular Way Purchase of FinancialAssets under Trade Date Accounting

Outstanding amount (before elimination of reciprocal accounts i.e. Due frcm Branches/Agencies Abroad) of inter-office transactions between the Bank's Head Office and its branches/agencies abroad, which shall only apply to domestic banks with branches/offices abroad

(viii) Schedule 42 -Disclosure of Due from FCDU/RBU and Due to FCDU/RBU

Require the disclosure of the breakdown of Due from FCDU/RBU and Due to FCDUIRBU.

(2) Annex B provides amendments to the FRP reporting templates, with respect to the following:

(a) Blocking and unblocking of cells (b) lnsertion of additional information through new line items (c) lnsertion of additional schedules

(3) The following guidelines shall likewise be observed in the preparation of the FRP:

(a) Due from FCDU/RBU (Asset) and Dueto FCDU/RBU (Liability)

The outstanding balance of the Due from FCDU/RBU and Due to FCDU/RBU shall be reported at gross amount in the balance sheet (i.e. not offset). The amounts reported shall form part of total assets and liabilities of the regular banking unit book and the FCDU/EFCDU book but said asset and liability accounts shall not be extended to the combined regular banking unit book and FCDU/EFCDU book total column so that the total assets and total liabilities of the combined regular banking unit book and FGDU/EFCDU book total column will already exclude said accounts' balances.

(b) Current restructured loans but are considered as non-performing

Restructured loans, as defined under Section X322.1 of the Manual of Regulations for Banks (MORB) which does not meet the required collateral value, shall be reported under the Past Due and Already Non-performing Loans in the FRP, regardless of whether the principal and interest payments are updated.

(c) FCDU Cover Report and Real Estate Exposure

The required report on real estate exposure under Circular No. 600 dated 4 February 2008 and FCDU cover report under Circular No. 601 dated 13 February 2008 shall no longer be submitted separately. The BSP shall internally extract said reports from the FRP. Banks are however reminded to monitor its compliance with the FCDU/EFCDU cover requirements on a daily basis.

For compliance.

NESTOR A. ESPENILLA, JR Deputy Governor