MORNBFI Vol. 1 - Planters Development Bank

§§ 4116Q.2 - 4116Q.311.12.31in reciprocity for and in behalf of the issuerQB;(ix) It must be issued in minimumdenominations of at least P500,000 or itsequivalent; and(x) It must clearly state on its face that it isnot a deposit and is not insured by the PDIC:Provided, That it shall be subject to acumulative discount factor of twenty percent(20%) per year during the last five (5) years tomaturity [i.e., twenty percent (20%) if theremaining life is four (4) years to less than five(5) years, forty percent (40%) if the remaininglife is three (3) years to less than four (4) years,etc.]: Provided, further, That where it isdenominated in a foreign currency, it shall berevalued periodically (at least monthly) inPhilippine peso using the same exchange rateused for revaluation of foreign currencydenominated assets, liabilities and forwardcontracts under existing regulations: Provided,finally, That, for purposes of reserve requirementregulation, it shall not be treated as equivalentto a deposit substitute liability or other forms ofborrowings; and(d) Deposit for perpetual and cumulativepreferred stock subscription;Provided, That the following items shall bededucted from the total of Lower Tier 2 capital:(1) Limited life redeemable preferred stocktreasury shares; and(2) Sinking fund for redemption of limitedlife redeemable preferred stock: Provided, Thatthe amount to be deducted shall be limited tothe balance of redeemable preferred stock afterapplying the cumulative discount factor:Provided, further, That the total amount ofLT2 capital that may be included in the Tier 2capital shall be a maximum of fifty percent (50%)of total Tier 1 capital (net of deductionstherefrom): Provided furthermore, That the totalamount of upper and lower Tier 2 capital thatmay be included in the qualifying capital shallbe a maximum of 100% of total Tier 1 capital(net of deductions therefrom);c. Less deductions from the total of Tier 1and Tier 2 capital, as follows:(1) Investments in equity of unconsolidatedsubsidiary banks and other subsidiary financialallied undertakings, but excluding insurancecompanies (for solo basis);(2) Investments in debt capital instrumentsof unconsolidated subsidiary banks (for solobasis);(3) Investments in equity of subsidiaryinsurance companies and subsidiary nonfinancialallied undertakings;(4) Reciprocal investments in equity of otherbanks/enterprises; and(5) Reciprocal investments in unsecuredsubordinated term debt instruments of otherbanks/QBs in excess of the lower of (i) anaggregate ceiling of five percent (5%) of totalTier 1 capital of the QB; or (ii) ten percent(10%) of the total outstanding unsecuredsubordinated term debt issuance of the otherbank/QB:Provided, That any asset deducted from thequalifying capital in computing the numeratorof the risk-based capital ratio shall not beincluded in the risk-weighted assets incomputing the denominator of the ratio.Capital instruments issued by QBs starting01 January 2011 should comply with theminimum conditions specified in AppendixQ-46c in order to be eligible as Hybrid Tier 1 orLower Tier 2 capital.(As amended by Circular Nos.716 dated 25 March 2011, 709 dated10 January 2011 and 560 dated 31 January 2007)§ 4116Q.3 (2008 - 4116Q.2) Risk-weightedassets. The risk-weighted assets shall bedetermined by assigning risk weights to amountsof on-balance sheet assets and to creditequivalent amounts of off-balance sheet items(inclusive of derivative contracts): Provided, Thatthe following shall be deducted from the totalrisk-weighted assets:(1) general loan loss provision (in excess ofthe amount permitted to be included in UT2capital); and(2) unbooked valuation reserves andother capital adjustments affecting assetaccounts based on the latest report ofManual of Regulations for Non-Bank Financial InstitutionsQ RegulationsPart I - Page 15