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(NAR) VOL. 9 NO. 3 / JULY - SEPTEMBER 1998

[ BSP CIRCULAR LETTER, July 13, 1998 ]


With reference to Circular No. 143 dated October 1, 1997, as amended, please be informed that the general loan loss provision shall be computed as follows:
Gross Loan PortfolioP xxx
Less: Exclusions 
1) Interbank Loans ReceivableP xxx
2) Current loans guaranteed by SBGFC, Phil. Export Guarantee, Guarantee Fund for SMEs & other government guarantee corporationsxxx
3) Loans considered non-risk under existing regulationsxxx
Total ExclusionsP xxx
Loan Portfolio, net of exclusionsP xxx
Less: 1) Specific Provisions for Classified Loans (at least equal to the BSP recommended specific loan lossprovisions based on latest examinationP xxx
Net Loan PortfolioP xxx
Prescribed Percentage for General Loan Loss
Provisioning based on Circular No. 164
dated April 13, 1998:
1% by 10.01.98
1 ½% by 04.01.99
2% by 10.01.99
General Loan Loss ProvisionP xxx

The same formula shall be adopted for loan loss provisioning with respect to loans granted by the trust department of banks either directly or thru various trust funds/managed funds.

Please be guided accordingly.

Adopted: 13 July 1998

Deputy Governor


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