332 MANDATORY ALLOCATION OF CREDIT RESOURCES TO MICRO, SMALL AND MEDIUM ENTERPRISES
a. Lending institutions shall refer to all banks, namely: UBs, KBs, TBs and RBs/ Coop Banks, including government-owned banks.
b. Total loan portfolio shall include all loans and receivables, other than those booked in the FCDU/EFCDU as defined in the Manual of Accounts section of the FRP under Sec. 172, gross of allowance for credit losses, excluding the following:
(1) Interbank loans receivable, other than (a) wholesale lending of a bank to conduit banks/QBs for on-lending to MSMEs, and (b) rediscounting facility granted to another bank for loans to MSMEs;
(2) Wholesale lending of a bank to conduit non-bank FIs without quasi-banking authority, other than those for on-lending to MSMEs;
(3) Loans granted under special financing programs, other than those for MSMEs;
(4) Loans granted to MSMEs, other than to BMBEs, to the extent funded by wholesale lending of, or rediscounted with, another bank;
(5) Agrarian reform credits/other agricultural loans granted under R.A. No. 10000, other than those eligible for compliance with the mandatory allocation of credit for MSMEs; and
(6) Loans and receivables arising from repo agreements, certificates of assignment/participation with recourse and securities lending and borrowing transactions.
c. MSMEs shall refer to any business activity within the major sectors of the economy, namely: industry, trade, services, including the practice of one’s profession, the operation of tourism-related establishments, and agri-business, which for this purpose refers to any business activity involving the manufacturing, processing, and/or production of agricultural produce, whether single proprietorship, cooperative, partnership or corporation:
(1) whose total assets, inclusive of those arising from loans but exclusive of the land on which the particular business entity’s office, plant and equipment are situated, must have a value falling under the following categories:
Micro : not more than P 3,000,000
Small : more than P 3,000,000 to P 15,000,000
Medium : more than P 15,000,000 to P 100,000,000
and
(2) duly registered with the appropriate agencies as presently provided by law except in the case of microenterprises as defined above.
a. For MSEs
(1) Actual extension of loans to eligible MSEs, other than to BMBEs which are covered in Item “c(3)” hereof: Provided, however, That loans granted to MSEs other than BMBEs, to the extent funded by wholesale lending of, or rediscounted with, another bank shall not be eligible as compliance with the mandatory credit allocation; or
(2) Loans granted to export, import, and domestic micro and small scale traders, other than to BMBEs which are covered in Item “c(3)” hereof: Provided, however, That loans granted to MSEs other than BMBEs, to the extent funded by wholesale lending of, or rediscounted with another bank shall not be eligible as compliance with the mandatory credit allocation; or
(3) Purchase of eligible MSE loans listed in Items “(1)” and “(2)” above on a “without recourse” basis from other banks and FIs; or
(4) Purchase/discount on a “with or without recourse” basis of MSE receivables, other than BMBE receivables which are covered in Item “c(3)” hereof; or
(5) Wholesale lending or rediscounting facility granted to PFIs for on-lending to MSEs, other than to BMBEs which are covered in Item “c(3)” hereof; or
(6) Wholesale lending or rediscounting facility granted to PFIs for on-lending to export, import, and domestic micro and small scale traders, other than to BMBEs which are covered in Item “c(3)” hereof; or
(7) Commercial letters of credit outstanding, net of margin deposits, issued for the account of MSEs.
b. For MEs
(1) Actual extension of loans to eligible MEs: Provided, however, That loans granted to MEs to the extent funded by wholesale lending of, or rediscounted with, another bank shall not be eligible as compliance with the mandatory credit allocation; or
(2) Loans granted to export, import, and domestic medium scale traders: Provided, however, That loans granted to MEs to the extent funded by wholesale lending of, or rediscounted with, another bank shall not be eligible as compliance with the mandatory credit allocation; or
(3) Purchase of eligible ME loans listed in Items “(1)” and “(2)” above on a “without recourse” basis from other banks and FIs; or
(4) Purchase/discount on a “with or without recourse” basis of ME receivables; or
(5) Wholesale lending or rediscounting facility granted to PFIs for on-lending to MEs; or
(6) Wholesale lending or rediscounting facility granted to PFIs for on-lending to export, import, and domestic medium scale traders; or
(7) Commercial letters of credit outstanding, net of margin deposits, issued for the account of MEs.
c. Alternative compliance for either or both MSEs or/and MEs
(1) Paid subscription/purchase of liability instruments as may be offered by the SB Corporation; or
(2) Paid subscription of preferred shares of stock of the SB Corporation; or
(3) Loans from whatever sources granted to BMBEs as provided under Sec. 333 (Incentives to participating financial institutions).
a. For non-compliance/under compliance with the prescribed portions of loan portfolio to be allocated to MSEs and MEs:
(1) For zero compliance for both MSEs and MEs – P500,000;
(2) For under compliance:
(a) For MSEs – percentage of undercompliance multiplied by P400,000
(b) For MEs – percentage of under- compliance multiplied by P100,000 to be computed as of end of each quarter.
(3) For willful making of a false or misleading statement to the Bangko Sentral – P500,000 per quarter-end report without prejudice to the sanctions under Section 35 of R.A. No. 7653.
b. For non-submission/delayed submission of reports on compliance with both the prescribed portions of loan portfolio to be allocated to MSEs and MEs, respectively:
(1) UBs/KBs – P1,200
(2) TB – 600
(3) RBs/Coop Banks – 180
per calendar day of delay.
(Circular No. 858 dated 21 November 2014)