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Adopted: 18 June 2014
Date Filed: 03 July 2014

The Monetary Board, in its Resolution No. 894 dated 5 June 2014, approved the amendments to pertinent regulations on Salary Loans. The Manual of Regulations for Banks (MORB) and the Manual for Regulations for Non-Bank Financial Institutions (MORNBFI) are hereby amended as follows:

Section 1. Section X321 of the MORB and Section 4337S of the MORNBFI including their respective subsections shall now read as:

“Section X321/4337S - Salary Loans. The Bangko Sentral shall promote the sustainable development of consumer lending such as salary loans under conditions of fair and sound credit practices.

Subsection X321.1/4337.1S Definition of terms

1. Salary Loans. Unsecured loans, granted to individuals on the basis of regular salary, pension or other fixed compensation, where repayment would come from such future remunerations, either through salary deduction, debit from the borrower’s deposit account, over-the-counter payment or other type of payment arrangement agreed upon by the borrower and lender.

Section 2. The Financial Reporting Package, prescribed under Subsection X191.2 of the MORB is further amended to revise the: (a) Manual of Accounts (MOA) to include the definition of Salary Loans; and (b) reporting templates of specific Financial Reporting Package for Banks (FRP) and Simplified Financial Reporting Package for Rural and Cooperative Banks (SFRP) as follows:

(a) Manual of Accounts

“x x x

“11. Loans and Receivables – xxx

“(a) Loans to Bangko Sentral ng Pilipinas – xxx

(b) xxx

“(c) Loans and Receivables-Others – xxx

“(c.1) xxx

“xxx

“(c.8) Loans to Individuals for Consumption Purposes - This refers to the amortized cost of loans granted to individuals for consumption purposes.

(c.8a) Credit Card - This refers to the amortized cost of loans granted to credit cardholders arising from purchases of goods and services, cash advances, annual membership/renewal fees as well as interest, penalties, insurance fees, processing/service fees and other charges.

(c.8b) Auto Loans - This refers to the amortized cost of loans granted to individuals for the acquisition of motor vehicles.

(c.8c) Salary Loans – This refers to the amortized cost of unsecured loans, granted to individuals on the basis of regular salary, pension or other fixed compensation where repayment would come from such future remunerations, either through salary deduction, debit from the borrower’s account, over the counter payment or other type of payment arrangement agreed upon by the borrower and lender.

(c.8.d) Others - This refers to the amortized cost of loans granted to individuals to finance other personal and household needs such as purchase of household appliances, furniture and fixtures and/or to pay taxes, hospital and educational bills.”

“xxx”

(b) Reporting Template

The following reporting templates of FRP, attached as Annex A-1, are revised to show a line for Salary Loans under the category of Loans to Individuals for Consumption Purposes:

11
11a	11a1	11a2	11a3	11a4
11b	11b1	11b2	11b3	11b4
11c	11c1	11c2	11c3	11c4
11d	11d1	11d2	11d3	11d4
11e	11e1	11e2	11e3	11e4
29d	29d1	29d2	29d3	29d4

Similarly, the reporting templates of Simplified FRP for Rural and Cooperative Banks, attached as Annex A-2, were revised for schedules 11, 11a1 to 11e1, and 29d1.

Moreover, Section 41625 of the MORNBFI is also amended to revise the reporting templates of the Consolidated Statement of Condition (CSOC) and Consolidated Statement of Income and Expenses (CSIE) of Non-Stock Savings and Loan Associations (NSSLAs), attached as Annex B, to show a line for Salary Loans and Interest/Discounts Earned - Salary Loans, respectively.

Banks and NSSLAs shall adopt the said revised reporting templates effective report ending 30 June 2014.

Section 3. This Circular shall take effect fifteen (15) calendar days following its publication either in the Official Gazette or in a newspaper of general circulation.

FOR THE MONETARY BOARD:

(SGD) AMANDO M. TETANGCO, JR.
Governor