Emerging Markets Rates and Currencies Handbook

38 Citi | Emerging Markets Currencies Handbook 2021 Non-trade flows For non-trade transactions exceeding USD 1MM where a corporation buys FCY and sells PHP, application to purchase FX and supporting documents listed under Appendix 1 of BSP FX Manual will need to be submitted to the bank. Regardless of FCY amount purchased, application to purchase FX and supporting documents will need to be submitted to the bank to settle non trade payments involving netting arrangements and/or e-commerce market participants. Non-trade transactions may be hedged and documentation (under Appendix 1 of FX Manual) is to be provided to Citi on or before settlement date. Similar with trade flows, the total notional amount of the transaction cannot not exceed the amount of the underlying FX obligation/exposure. Capital flows/FDI Funding/Capital Infusion (sell FCY/buy PHP) • A certificate of inward remittance is provided by Citi. This is needed to obtain a BSP registration document (Bangko Sentral Registration Document or BSRD). The BSRD is one of the required documents for capital and dividend repatriation. Private Sector Foreign Currency Loans (not publicly-guaranteed) • All private sector loans that are not publicly guaranteed and not covered by Section 24.3 of the BSP FX Manual shall be registered with the BSP if these are to be serviced with FX resources of banks. Supporting documents required from the corporation are as per mend to: Appendix 1.3 of the BSP FX Manual. Notice to the BSP is needed prior to purchase of FX for prepayment and payment on past due BSP-registered loans. • All foreign borrowings, including bonds/notes/other debt instruments, whether or not these are BSP- registered shall be regularly reported to the BSP. Philippines • All foreign currency loans (whether in favor of residents or non-residents) extended by banks operating in the Philippines shall be reported by the creditor bank to the Bangko Sentral ng Pilipinas (BSP) using prescribed forms. For loans extended to non-residents, these cannot be serviced with FX resources of Authorized Agent Banks (AABs)/AAB forex corporations. • Authorized Agent Banks may only extend peso financing to non-residents without prior BSP approval if specifically allowed under the Manual of Regulations for Banks (MORB). Peso financing to non-residents is subject to prior BSP approval, if it is for use in projects/programs/ purposes that are: (i) not covered under those specifically allowed under the MORB; and (ii) legitimate and not contrary to laws, regulations, public order, public health, public safety or public policy. The creditor bank shall submit to the BSP its application for approval of the proposed peso financing program to non-residents. Additional Comments Balance sheet hedging allowed on selected items, Cash flow exposure hedges are permitted. Overdrafts are not allowed by local regulations. Citi Philippines 16/F Citi Plaza 34th Street Bonifacio Global City Taguig City 1634 Philippines css.ph@citi.com FX Sales Contact: +632 8894 7881