PART THREE. FINANCIAL ACCOUNT TRANSACTIONS
Chapter I
LOANS AND GUARANTEES

Section 25. Servicing

1. The following shall be subject to prior BSP approval:

   1. Prepayment of public sector/publicly-guaranteed private sector loans; and

   2. Payment by the public sector: (i) for loans that are past due for more than one (1) month from original due date; and (ii) under the guarantee covering publicly-guaranteed private sector loans that are past due.

2. The borrower or its duly authorized representative shall submit a notice to the BSP at least one (1) month prior to target date of purchase of FX for the following private sector loans/borrowings that are not publicly-guaranteed:

   1. Prepayment of BSP-registered loans/borrowings [except for prepayment of BSP-registered short-term private sector loans/borrowings (including those in the form of bonds/notes/other debt instruments) that are not publicly-guaranteed, which do not require prior BSP notification]; and
   2. Payments on loans/borrowings that are past due for more than one (1) month from original due dates.

3. All prepayments shall be subject to the following:

   1. The FX selling AAB/AAB forex corp shall require documents prescribed in Appendix 1.3 of the FX Manual to support sale of FX for debt servicing;
   2. The FX sold/outwardly remitted shall be duly reported by the FX selling/remitting AAB under the appropriate schedules of FX Form 1, based on instructions of, and declared purpose by, the FX purchaser.

4. AABs/AAB forex corps may sell FX for servicing of foreign/foreign currency loans/borrowings (including those in the form of bonds/notes/other debt instruments) of the public and private sectors upon submission to the FX selling institution of a duly accomplished and signed Application To Purchase FX (Annex A), supported by documents listed under Appendices 1 and 1.3 (as applicable).

5. FX sold by AABs/AAB forex corps for payments on loans/borrowings (including those in the form of bonds/notes/other debt instruments) and related fees/charges shall either be:

   1. remitted directly to the account of the creditor/intended beneficiary on the date of purchase; or
   2. credited to the FCDU account of the resident borrower (or the guarantor in case payment will be made by the guarantor) with the FX selling AAB (or another AAB) for eventual remittance on or before due date to the intended beneficiary; Provided, that the applicant purchaser shall certify that: (i) the FX shall be used for the declared purpose; (ii) funds credited to the FCDU account shall eventually be remitted to the intended beneficiary on or before due date; and (iii) the resident borrower shall include in the remittance instructions to the remitting bank, the purpose of the remittance.

The remitting bank shall report the FX remittances to BSP under the applicable schedule/s of FX Form 1, based on instructions of, and the purpose declared by, the FX purchaser.

All loan payments (including prepayments) made, irrespective of the source of FX funding, shall be reported by the borrower to BSP-IOD using the prescribed forms (Annexes E.​1 and E.2).