MORNBFI Vol. 1 - Planters Development Bank

§§ 4501Q - 4505Q08.12.31PART FIVEFOREIGN EXCHANGE OPERATIONSSection 4501Q Authority; CoverageWith prior approval of the Monetary Board,and subject to the provisions of Article III,Chapter IV of R.A. No. 7653 and Section7(13) of P.D. No. 129, as amended, an IHmay engage in foreign exchange operationswhich shall be limited to the servicing ofproject or program requirements of thefollowing enterprises:a. BSP-certified export-oriented firms;b. Board of Investments-registeredexport-oriented firms; andc. Construction or service firms withoverseas contracts approved by theDepartment of Labor and Employment.Sec. 4502Q Specific Foreign ExchangeActivities. The specific foreign exchangeoperations which IHs may undertake inconnection with the preceding Section are:a. Arranging or contracting of foreignloans for the account of the client firm, orcontracting of foreign loans for the accountof the IH for relending to the client firm,subject to pertinent BSP rules andregulations;b. Providing import- and export-relatedservices to said firms such as letters of creditand other acceptable modes of payment, andthe discounting of export drafts: Provided,That the total amount of foreign exchangetransactions IHs may deal in shall not exceedthe amount of the financing arranged orprovided by the IH which involves theimportation and exportation of related goodsand services: Provided, further, That theamount of letters of credit outstanding of anIH shall not exceed, at any given time, twiceits net worth, except as may otherwise bespecifically authorized by the Monetary Board;c. Holding foreign currency balanceswith foreign correspondents in connectionwith export-related services but in no casefor speculative purposes;d. Entering into forward foreignexchange contracts with the BSP inconnection with the foregoing activities;and/ore. Such other related foreign exchangeactivities as may be approved by theMonetary Board.Sec. 4503Q Separate Department. AnyIH that may be authorized to engage inforeign exchange operations shall set upa separate department/unit to handle suchoperations.Sec. 4504Q Applicability of PertinentBangko Sentral Rules. The foreign exchangeoperations of an IH are subject to allapplicable BSP rules and regulations onforeign exchange operations, includingmodifications thereof, considering thespecial nature of IH operations, and thesanctions in connection therewith.Sec. 4505Q Aggregate Ceiling onIssuance of Guarantees. Total standbyletters of credit, foreign and domestic,including guarantees, the nature of whichrequires the guarantor to assume theliabilities/obligations of third parties incase of their inability to pay, that may beissued by QBs and outstanding at anygiven time, shall not exceed fifty percent(50%) of the QB’s net worth, except thosefully secured by cash, hold-out on deposits/deposit substitutes on governmentsecurities.Manual of Regulations for Non-Bank Financial InstitutionsQ RegulationsPart V - Page 1