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List of BSP Circulars Related to Microfinance

A. Microfinance Regulations

1. Microfinance Loan Regulations

  • Circular 272 (January 2001) provides the operating guidelines of the General Banking Law Provisions specifically it recognizes cash-flow based lending as a peculiar feature of microfinance, defines microfinance loans and provides for the exemption of microfinance loans from rules and regulations issued with regard to unsecured loans

  • Circular 364 (19 January 2003) reduces to 75% the risk weight applicable to small and medium enterprises (SMEs) and microfinance loan portfolios that meet prudential standards

  • Circular 409 (14 October 2003) provides the rules and regulations for the portfolio-at-risk (PAR) and the corresponding allowance for probable losses which depend on the number of days of missed payment

2. Rediscounting for Microfinance Loans

  • Circular 282 (19 April 2001) opens a rediscounting facility for rural banks/cooperative rural banks engaged in microfinance

  • Circular 324 (2 March 2002) opens a rediscounting facility for thrift banks engaged in microfinance

3. Reporting Requirements for Microfinance Loans

  • Circular Letter (2 October 2002) – requiring reporting of banks with microfinance operations

  • Circular 607 (30 April 2008) –amends Circular Letter dated 2 October 2002 on the reportorial requirements of banks' microfinance loans

4. Documentary Requirements for Microfinance Loans Clients

  • Circular 549 (09 October 2006) exempts microfinance from the required submission of additional documents (income tax return, financial statement) for the granting of loans

  • Circular 746 (3 February 2012 ) –extends up to 31 December 2014 the exemption of microfinance from the required submission of additional documents (income tax return, financial statement) for the granting of loans

5. Microfinance Products

  • Circular 678 (6 January 2010) provides rules and regulations that govern the approval of banks' housing microfinance products

  • Circular 680 (03 February 2010) provides rules and regulations on the approval of banks' micro-agri loans

  • Circular 748 (13 February 2012 ) –amends Circular 680 to enhance the rules and regulations on banks’ micro-agri loans

  • Circular 683 (23 February 2010) –provides rules and regulations in the marketing, sale and servicing of microinsurance products by banks

  • Circular 744 (28 December 2011) defines microenterprise loan plus or “microfinance plus” which ranges from PhP 150,001- PhP 300,000 and caters to the growing business of microfinance clients

  • Circular 782 (21 January 2013) amends the characteristics of a microfinance client to include among the types of clients those poor and low income clients with annual family income below the national average based from the latest available National Statistics Office (NSO) Family Income and Expenditure Survey (FIES)

  • Circular 796 (3 May 2013) amends the general features of a microfinance savings deposit account by increasing the ceiling of average savings daily balance from PhP 15,000 to PhP 40,000

6. Governance of Microfinance Banks (Bank – NGO Relationship)

  • Circular 725 (16 June 2011 ) –provides the framework for governance arrangements and contractual agreements between a bank with microfinance operations and a related microfinance non-government organization/foundation

7. Microfinance Ratings

  • Circular 685 (7 April 2010) –provides rules and regulations in the recognition of Microfinance Institution Rating Agencies

B. Liberalized Branching for Banks

  • Circular 273 (27 February 2001) partial lifting of moratorium on establishment of new banks as long as the new banks are microfinance-oriented

  • Circular 340 (30 July 2002) provides the rules and regulations concerning the establishment of branches or loan collection and disbursement points (LCDPs)

  • Circular 365 (16 January 2003) liberalizes select provisions of Circular 340

  • Circular 369 (17 February 2003) liberalizes select provisions of Circular 340

  • Circular 505 (22 December 2005) revises branching guidelines by allowing qualified microfinance oriented banks and microfinance oriented branches of regular banks to establish branches anywhere in the Philippines

  • Circular 624 (13 October 2008) –amends branching policy and guidelines that governs the establishment of branches, extension offices and other banking offices (OBOs)

  • Circular 669 (22 October 2009) allows the servicing of limited withdrawals by microfinance/BMBE clients in LCDPs and OBOs of microfinance oriented banks/branches

  • Circular 694 (14 October 2010) allows for the establishment of micro-banking offices and defines microfinance products

  • Circular 727 (23 June 2011) amends the guidelines on branching and voluntary closure/sale/acquisition of branches/other banking offices

  • Circular 728 (23 June 2011) allows for phased lifting of branching restriction in the eight (8) "restricted areas" of Metro Manila

  • Circular 759 (30 May 2012) amends the branching policy and guidelines under the Manual of Regulations for Banks
  • Circular 777 (13 December 2012) amends the subsection on the Manual of Regulations for Banks regarding the opening of approved but unopened branches

C. E-Money Issuance Regulations

  • Circular 649 (09 March 2009) provides the guidelines governing the issuance of electronic money (e-money) and the operations of electronic money issuers (EMI) in the Philippines

  • Circular 704 (22 December 2010) provides the guidelines on Outsourcing of Services by Electronic Money Issuers (EMIs) to Electronic Money Network Service Providers (EMNSP)

D. Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT)

  • Circular 608 (20 May 2008) revises the rules on acceptable identification cards which lessened the requirement to 1 valid identification card (from previous required 2 IDs) and widened the range of acceptable IDs

  • Circular 706 (05 January 2011) provides updated anti-money laundering rules that recognizes the importance of financial inclusion

  • Circular 792 (03 May 2013) amends the list of valid IDs for financial transactions

E. Transparency and Disclosure

  • Circular 730 (20 July 2011) provides enhanced rules to implement the Truth in Lending Act to enhance transparency in loan transactions of all banks

  • Circular 754 (17 April 2012) provides enhanced rules to implement the Truth in Lending Act to enhance transparency in loan transactions of all non-bank financial institutions under BSP supervision

  • Circular 755 (20 April 2012) provides enhanced rules to implement the Truth in Lending Act to enhance transparency in loan transactions of all credit granting institutions under other regulators like the Securities and Exchange Commission, Insurance Commission and Cooperative Development Authority

F. Mandatory Credit to Marginalized Sectors

  • Circular 374 (11 March 2003) guidelines for the implementation of the Barangay Micro-Business Enterprise Law

  • Circular 570 (24 May 2007) allows wholesale loans of universal, commercial and branches of foreign banks to non-bank microfinance institutions as compliance to the 6% mandatory credit allocation to small enterprises

  • Circular 625 (14 October 2008) provides rules and regulations that govern the mandatory allocation of credit resources to micro, small and medium enterprises